Federal Register / Vol. 81, No. 26 / Tuesday, February 9, 2016 / Notices 6905 

2Applicants request relief with respect to the 

named Applicants, any future Series of the Trusts 

and any other existing or future registered open-end 

management company or series thereof that intends 

to rely on the requested order in the future and that: 

(a) is advised by the Manager or by any entity 

controlling, controlled by, or under common 

control with the Manager or its successor (included 

in the term ‘‘Manager’’); (b) uses the multi-manager 

structure described in the application; and (c) 

complies with the terms and conditions of the 

application (any such series, a ‘‘Subadvised 

Series’’). For purposes of the requested order, 

‘‘successor’’ is limited to an entity that results from 

a reorganization into another jurisdiction or a 

change in the type of business organization. 

3A ‘‘Sub-Adviser’’ for a Series is (1) an indirect 

or direct ‘‘wholly owned subsidiary’’ (as such term 

is defined in the Act) of the Manager for that Series, 

or (2) a sister company of the Manager for that 

Series that is an indirect or direct ‘‘wholly-owned 

subsidiary’’ (as such term is defined in the Act) of 

the same company that, indirectly or directly, 

wholly owns the Manager (each of (1) and (2) a 

‘‘Wholly-Owned Sub Adviser’’ and collectively, the 

‘‘Wholly-Owned Sub-Advisers’’), or (3) an 

investment sub-adviser for that Series that is not an 

‘‘affiliated person’’ (as such term is defined in 

Section 2(a)(3) of the Act) of the Series or the 

Adviser, except to the extent that an affiliation 

arises solely because the sub-Adviser serves as a 

sub-adviser to one or more Series (each a ‘‘NonAffiliated Sub-Adviser’’ and collectively, the ‘‘NonAffiliated Sub-Advisers’’) . 

4The requested relief will not extend to any subadviser, other than a Wholly-Owned Sub-Adviser, 

who is an affiliated person, as defined in section 

2(a)(3) of the Act, of the Subadvised Series or the 

Manager, other than by reason of serving as a subadviser to one or more of the Subadvised Series 

(‘‘Affiliated Sub-Adviser’’). 

hearing. Interested persons may request 

a hearing by writing to the 

Commission’s Secretary and serving 

applicants with a copy of the request, 

personally or by mail. Hearing requests 

should be received by the Commission 

by 5:30 p.m. on February 26, 2016, and 

should be accompanied by proof of 

service on the applicants, in the form of 

an affidavit or, for lawyers, a certificate 

of service. Pursuant to rule 0–5 under 

the Act, hearing requests should state 

the nature of the writer’s interest, any 

facts bearing upon the desirability of a 

hearing on the matter, the reason for the 

request, and the issues contested. 

Persons who wish to be notified of a 

hearing may request notification by 

writing to the Commission’s Secretary. 

ADDRESSES: Secretary, U.S. Securities 

and Exchange Commission, 100 F Street 

NE., Washington, DC 20549–1090. 

Applicants: 14376, M243, Enfield, CT 

06082. 

FOR FURTHER INFORMATION CONTACT: 

Bruce MacNeil, Senior Counsel, at (202) 

551–6817, or James M. Curtis, Branch 

Chief, at (202) 551–6712 (Division of 

Investment Management, Chief 

Counsel’s Office). 

SUPPLEMENTARY INFORMATION: The 

following is a summary of the 

application. The complete application 

may be obtained via the Commission’s 

Web site by searching for the file 

number, or an applicant using the 

Company name box, at http://

www.sec.gov/search/search.htm or by 

calling (202) 551–8090. 

Summary of the Application 

1. The Manager will serve as the 

investment adviser to each Subadvised 

Series pursuant to an investment 

advisory agreement with each Trust 

(each, an ‘‘Investment Management 

Agreement,’’ and collectively, the 

‘‘Investment Management 

Agreements’’).2 The Manager will 

provide the Subadvised Series with 

continuous and comprehensive 

investment management services subject 

to the supervision of, and policies 

established by, each Subadvised Series’ 

board of directors (‘‘Board’’). The 

Management Agreements permit the 

Manager, subject to the approval of the 

Board, to delegate to one or more SubAdvisers the responsibility to provide 

the day-to-day portfolio investment 

management of each Subadvised Series, 

subject to the supervision and direction 

of the Manager.3 The primary 

responsibility for managing the 

Subadvised Series will remain vested in 

the Manager. The Manager will hire, 

evaluate, allocate assets to and oversee 

the Sub-Advisers, including 

determining whether a Sub-Adviser 

should be terminated, at all times 

subject to the authority of the Board. 

2. Applicants request an exemption to 

permit the Manager, subject to Board 

approval, to hire a Non-Affiliated SubAdviser or a Wholly-Owned SubAdviser, pursuant to Sub-Advisory 

Agreements and materially amend SubAdvisory Agreements with NonAffiliated Sub-Advisers and WhollyOwned Sub-Advisers without obtaining 

the shareholder approval required under 

section 15(a) of the Act and rule 18f–2 

under the Act.4 Applicants also seek an 

exemption from the Disclosure 

Requirements to permit a Subadvised 

Series to disclose (as both a dollar 

amount and a percentage of the 

Subadvised Series’ net assets): (a) The 

aggregate fees paid to the Manager and 

any Wholly-Owned Sub-Advisers; (b) 

the aggregate fees paid to Non-Affiliated 

Sub-Advisers, and (c) the fee paid to 

each Affiliated Sub-Adviser. 

3. Applicants agree that any order 

granting the requested relief will be 

subject to the terms and conditions 

stated in the Application. Such terms 

and conditions provide for, among other 

safeguards, appropriate disclosure to 

Subadvised Series’ shareholders and 

notification about sub-advisory changes 

and enhanced Board oversight to protect 

the interests of the Subadvised Series’ 

shareholders. 

4. Section 6(c) of the Act provides that 

the Commission may exempt any 

person, security, or transaction or any 

class or classes of persons, securities, or 

transactions from any provisions of the 

Act, or any rule thereunder, if such 

relief is necessary or appropriate in the 

public interest and consistent with the 

protection of investors and purposes 

fairly intended by the policy and 

provisions of the Act. Applicants 

believe that the requested relief meets 

this standard because, as further 

explained in the Application, the 

Investment Management Agreements 

will remain subject to shareholder 

approval, while the role of the SubAdvisers is substantially equivalent to 

that of individual portfolio managers, so 

that requiring shareholder approval of 

Sub-Advisory Agreements would 

impose unnecessary delays and 

expenses on the Subadvised Series. 

Applicants believe that the requested 

relief from the Disclosure Requirements 

meets this standard because it will 

improve the Manager’s ability to 

negotiate fees paid to the Sub-Advisers 

that are more advantageous for the 

Subadvised Series. 

For the Commission, by the Division of 

Investment Management, under delegated 

authority. 

Robert W. Errett, 

Deputy Secretary. 

[FR Doc. 2016–02489 Filed 2–8–16; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Investment Company Act Release No. 

31980; 812–14433] 

Medallion Financial Corp.; Notice of 

Application 

February 3, 2016. 

AGENCY: Securities and Exchange 

Commission (‘‘Commission’’). 

ACTION: Notice of an application for an 

order under section 6(c) of the 

Investment Company Act of 1940 (the 

‘‘Act’’) for an exemption from sections 

23(a), 23(b) and 63 of the Act, and under 

sections 57(a)(4) and 57(i) of the Act and 

rule 17d–1 under the Act permitting 

certain joint transactions otherwise 

prohibited by section 57(a)(4) of the Act. 

SUMMARY: Summary of the Application: 

Applicant, Medallion Financial Corp. 

(the ‘‘Company’’), requests an order to 

permit it to issue restricted shares of its 

common stock to its officers and 

mstockstill on DSK4VPTVN1PROD with NOTICES

6906 Federal Register / Vol. 81, No. 26 / Tuesday, February 9, 2016 / Notices 

1The Company was incorporated in Delaware in 

1995 and commenced operations on May 29, 1996, 

in connection with the closing of its initial public 

offering and simultaneous acquisition of three 

established finance companies. Section 2(a)(48) 

defines a BDC to be any closed-end investment 

company that operates for the purpose of making 

investments in securities described in sections 

55(a)(1) through 55(a)(3) of the Act and makes 

available significant managerial assistance with 

respect to the issuers of such securities. 

2The Plan, except as noted in the application, 

will operate in a manner identical to the operation 

of the 2009 Employee Plan that is the subject of a 

prior order received by the Company. See 

Medallion Financial Corp., Investment Company 

Act Release Nos. 29201 (Apr. 1, 2010) (notice) and 

29258 (Apr. 26, 2010) (order). 

3The Compensation Committee of the Board (the 

‘‘Committee’’) is comprised solely of the Noninterested Directors. 

4For purposes of calculating compliance with 

this limit, the Company will count as Restricted 

Stock all shares of its common stock that are issued 

pursuant to the Plan less any shares that are 

forfeited back to the Company and cancelled as a 

result of forfeiture restrictions not lapsing. 

5The term ‘‘required majority,’’ when used with 

respect to the approval of a proposed transaction, 

plan, or arrangement, means both a majority of a 

BDC’s directors or general partners who have no 

financial interest in such transaction, plan, or 

arrangement and a majority of such directors or 

general partners who are not interested persons of 

such company. 

employees under the terms of an 

employee compensation plan. 

DATES: Filing Dates: The application was 

filed on March 17, 2015, and amended 

on July 15, 2015, September 24, 2015, 

and December 11, 2015. 

Hearing or Notification of Hearing: An 

order granting the application will be 

issued unless the Commission orders a 

hearing. Interested persons may request 

a hearing by writing to the 

Commission’s Secretary and serving 

applicant with a copy of the request, 

personally or by mail. Hearing requests 

should be received by the Commission 

by 5:30 p.m. on February 29, 2016, and 

should be accompanied by proof of 

service on applicant, in the form of an 

affidavit or, for lawyers, a certificate of 

service. Pursuant to Rule 0–5 under the 

Act, hearing requests should state the 

nature of the writer’s interest, any facts 

bearing upon the desirability of a 

hearing on the matter, the reason for the 

request, and the issues contested. 

Persons who wish to be notified of a 

hearing may request notification by 

writing to the Commission’s Secretary. 

ADDRESSES: Secretary, U.S. Securities 

and Exchange Commission, 100 F Street 

NE., Washington, DC 20549–1090. 

Applicant, Marisa T. Silverman, General 

Counsel, Medallion Financial Corp., 437 

Madison Avenue, 38th Floor, New York, 

NY 10022. 

FOR FURTHER INFORMATION CONTACT: 

Laura L. Solomon, Senior Counsel, at 

(202) 551–6915, or Daniele Marchesani, 

Branch Chief, at (202) 551–6821, (Chief 

Counsel’s Office, Division of Investment 

Management). 

SUPPLEMENTARY INFORMATION: The 

following is a summary of the 

application. The complete application 

may be obtained via the Commission’s 

Web site by searching for the file 

number, or for an applicant using the 

Company name box, at http://

www.sec.gov/search/search.htm, or by 

calling (202) 551–8090. 

Applicant’s Representations 

1. The Company, a Delaware 

corporation, is an internally managed, 

non-diversified, closed-end investment 

company that has elected to be 

regulated as a business development 

company (‘‘BDC’’) under the Act.1 The 

Company is a specialty finance 

company that has a leading position in 

originating, acquiring, and servicing 

loans that finance taxicab medallions 

and various types of commercial 

businesses. The Company currently 

operates its business through three 

wholly-owned consolidated subsidiaries 

and one wholly-owned unconsolidated 

portfolio company. Shares of the 

Company’s common stock are traded on 

the NASDAQ Global Select Market 

under the symbol ‘‘TAXI.’’ As of March 

10, 2015, there were 24,771,864 shares 

of the Company’s common stock 

outstanding. As of that date, the 

Company had 151 employees, including 

employees of its wholly-owned 

subsidiaries (‘‘Wholly-Owned 

Subsidiaries’’). 

2. The Company currently has a eightmember board of directors (the ‘‘Board’’) 

of whom three are ‘‘interested persons’’ 

of the Company within the meaning of 

section 2(a)(19) of the Act and five are 

not interested persons (the ‘‘Noninterested Directors’’). The Company 

has six directors who are neither officers 

nor employees of the Company. 

3. The Company believes that its 

successful performance depends on its 

ability to offer fair compensation 

packages to its professionals that are 

competitive with those offered by other 

investment management businesses. 

The Company believes that the ability to 

offer equity-based compensation to its 

professionals is vital to the Company’s 

future growth and success. The 

Company wishes to adopt the 2015 

Employee Restricted Stock Plan (the 

‘‘Plan’’) providing for the periodic 

issuance of shares of restricted stock 

(i.e., stock that, at the time of issuance, 

is subject to certain forfeiture 

restrictions, and thus is restricted as to 

its transferability until such forfeiture 

restrictions have lapsed) (the 

‘‘Restricted Stock’’) for its employees 

and officers, and employees of its 

Wholly-Owned Subsidiaries (each a 

‘‘Participant,’’ and collectively, the 

‘‘Participants’’).2

4. The Plan will authorize the 

issuance of shares of Restricted Stock 

subject to certain forfeiture restrictions. 

These restrictions may relate to 

continued employment or service on the 

Board, achievement of specified 

performance objectives, or other 

restrictions deemed by the Committee 

(as defined below) to be appropriate.3

The Restricted Stock will be subject to 

restrictions on transferability and other 

restrictions as required by the 

Committee. Except to the extent 

restricted under the terms of the Plan, 

a Participant granted Restricted Stock 

will have all the rights of any other 

stockholder, including the right to vote 

the Restricted Stock and the right to 

receive dividends. During the restriction 

period, the Restricted Stock generally 

may not be sold, transferred, pledged, 

hypothecated, margined, or otherwise 

encumbered by the Participant. Except 

as otherwise provided for in a 

Participant’s employment agreement or 

as the Board may determine, upon 

termination of a Participant’s 

employment or service on the Board 

during the applicable restriction period, 

Restricted Stock for which forfeiture 

restrictions have not lapsed at the time 

of such termination shall be forfeited. 

5. The maximum amount of Restricted 

Stock that may be issued under the Plan 

will be 10% of the outstanding shares of 

common stock of the Company on the 

effective date of the Plan plus 10% of 

the number of shares of the Company’s 

common stock issued or delivered by 

the Company (other than pursuant to 

compensation plans) during the term of 

the Plan.4 The Plan limits the total 

number of shares that may be awarded 

to any single Participant in a fiscal year 

to 200,000 shares. In addition, no 

Restricted Stock Participant may be 

granted more than 25% of the shares 

reserved for issuance under the Plan. 

The Plan will be administered by the 

Committee, which, upon approval of the 

required majority, as defined in section 

57(o) of the Act,5 of the Board, will 

award shares of Restricted Stock to the 

Participants from time to time as part of 

the Participants’ compensation based on 

a Participant’s actual or expected 

performance and value to the Company. 

6. Each issuance of Restricted Stock 

under the Plan will be approved by the 

required majority, as defined in section 

57(o) of the Act, of the Company’s 

directors on the basis that the issuance 

mstockstill on DSK4VPTVN1PROD with NOTICES

Federal Register / Vol. 81, No. 26 / Tuesday, February 9, 2016 / Notices 6907 

6The Company asks that the order apply also to 

any future officers and employees of the Company 

and future employees of the Company’s WhollyOwned Subsidiaries that are eligible to receive 

Restricted Stock under the Plan. Additionally, to 

the extent that the Company creates or acquires 

additional Wholly-Owned Subsidiaries, and to the 

extent that such future Wholly-Owned Subsidiaries 

have employees to whom the relief requested herein 

would otherwise apply, the Company asks that such 

relief, if granted, be extended to such employees of 

any future Wholly-Owned Subsidiaries. 

7The Company will comply with the 

amendments to the disclosure requirements for 

executive and director compensation, related party 

transactions, director independence and other 

corporate governance matters, and security 

ownership of officers and directors to the extent 

adopted and applicable to BDCs. See Executive 

Compensation and Related Party Disclosure, 

Securities Act Release No. 8655 (Jan. 27, 2006) 

(proposed rule); Executive Compensation and 

Related Party Disclosure, Securities Act Release No. 

8732A (Aug. 29, 2006) (final rule and proposed 

rule), as amended by Executive Compensation 

Disclosure, Securities Act Release No. 8765 (Dec. 

22, 2006) (adopted as interim final rules with 

request for comments). 

is in the best interests of the Company 

and its stockholders. The date on which 

the required majority approves an 

issuance of Restricted Stock will be 

deemed the date on which the subject 

Restricted Stock is granted. 

7. The Plan has been approved by the 

Committee, as well as the Board, 

including the required majority as 

defined in section 57(o) of the Act. The 

Plan will be submitted for approval to 

the Company’s stockholders, and will 

become effective upon such approval, 

subject to and following receipt of the 

order. 

Applicant’s Legal Analysis 

Sections 23(a) and (b), Section 63 

1. Under section 63 of the Act, the 

provisions of section 23(a) of the Act 

generally prohibiting a registered 

closed-end investment company from 

issuing securities for services or for 

property other than cash or securities 

are made applicable to BDCs. This 

provision would prohibit the issuance 

of Restricted Stock as a part of the Plan. 

2. Section 23(b) generally prohibits a 

closed-end management investment 

company from selling its common stock 

at a price below its current net asset 

value (‘‘NAV’’). Section 63(2) makes 

section 23(b) applicable to BDCs unless 

certain conditions are met. Because 

Restricted Stock that would be granted 

under the Plan would not meet the 

terms of section 63(2), sections 23(b) 

and 63 prohibit the issuance of the 

Restricted Stock. 

3. Section 6(c) provides that the 

Commission may, by order upon 

application, conditionally or 

unconditionally exempt any person, 

security, or transaction, or any class or 

classes of persons, securities or 

transactions, from any provision of the 

Act, if and to the extent that the 

exemption is necessary or appropriate 

in the public interest and consistent 

with the protection of investors and the 

purposes fairly intended by the policy 

and provisions of the Act. 

4. The Company requests an order 

pursuant to section 6(c) of the Act 

granting an exemption from the 

provisions of sections 23(a) and (b) and 

section 63 of the Act.6 The Company 

states that the concerns underlying 

those sections include: (a) Preferential 

treatment of investment company 

insiders and the use of options and 

other rights by insiders to obtain control 

of the investment company; (b) 

complication of the investment 

company’s structure that made it 

difficult to determine the value of the 

company’s shares; and (c) dilution of 

stockholders’ equity in the investment 

company. The Company states that the 

Plan does not raise concerns about 

preferential treatment of the Company’s 

insiders because the Plan is a bona fide 

compensation plan of the type common 

among corporations generally. In 

addition, section 61(a)(3)(B) of the Act 

permits a BDC to issue to its officers, 

directors and employees, pursuant to an 

executive compensation plan, warrants, 

options and rights to purchase the 

BDC’s voting securities, subject to 

certain requirements. The Company 

states that, for reasons that are unclear, 

section 61 and its legislative history do 

not address the issuance by a BDC of 

restricted stock as incentive 

compensation. The Company states, 

however, that the issuance of Restricted 

Stock is substantially similar, for 

purposes of investor protection under 

the Act, to the issuance of warrants, 

options, and rights as contemplated by 

section 61. The Company also asserts 

that the Plan would not become a means 

for insiders to obtain control of the 

Company because the number of shares 

of the Company issuable under the Plan 

would be limited as set forth in the 

application. Moreover, no individual 

Restricted Stock Participant could be 

issued more than 25% of the shares 

reserved for issuance under the Plan. 

5. The Company further states that the 

Plan will not unduly complicate the 

Company’s structure because equitybased compensation arrangements are 

widely used among corporations and 

commonly known to investors. The 

Company notes that the Plan will be 

submitted to its stockholders for their 

approval. The Company represents that 

a concise, ‘‘plain English’’ description of 

the Plan, including its potential dilutive 

effect, will be provided in the proxy 

materials that will be submitted to the 

Company’s stockholders. The Company 

also states that it will comply with the 

proxy disclosure requirements in Item 

10 of Schedule 14A under the Securities 

Exchange Act of 1934 (the ‘‘Exchange 

Act’’). The Company further notes that 

the Plan will be disclosed to investors 

in accordance with the requirements of 

the Form N–2 registration statement for 

closed-end investment companies, and 

pursuant to the standards and 

guidelines adopted by the Financial 

Accounting Standards Board for 

operating companies. In addition, the 

Company will comply with the 

disclosure requirements for executive 

compensation plans applicable to 

operating companies under the 

Exchange Act.7 The Company thus 

concludes that the Plan will be 

adequately disclosed to investors and 

appropriately reflected in the market 

value of the Company’s shares. 

6. The Company acknowledges that, 

while awards granted under the Plan 

would have a dilutive effect on the 

stockholders’ equity in the Company, 

that effect would be outweighed by the 

anticipated benefits of the Plan to the 

Company and its stockholders. The 

Company asserts that it needs the 

flexibility to provide the requested 

equity-based employee compensation in 

order to be able to compete effectively 

with other financial services firms for 

talented professionals. These 

professionals, the Company suggests, in 

turn are likely to increase the 

Company’s performance and 

stockholder value. The Company also 

asserts that equity-based compensation 

would more closely align the interests of 

the Company’s employees with those of 

its stockholders. In addition, the 

Company states that its stockholders 

will be further protected by the 

conditions to the requested order that 

assure continuing oversight of the 

operation of the Plan by the Company’s 

Board. 

Section 57(a)(4), Rule 17d–1 

7. Section 57(a) proscribes certain 

transactions between a BDC and persons 

related to the BDC in the manner 

described in section 57(b) (‘‘57(b) 

persons’’), absent a Commission order. 

Section 57(a)(4) generally prohibits a 

57(b) person from effecting a transaction 

in which the BDC is a joint participant 

absent such an order. Rule 17d–1, made 

applicable to BDCs by section 57(i), 

proscribes participation in a ‘‘joint 

enterprise or other joint arrangement or 

profit-sharing plan,’’ which includes a 

stock option or purchase plan. 

Employees and directors of a BDC are 

mstockstill on DSK4VPTVN1PROD with NOTICES

6908 Federal Register / Vol. 81, No. 26 / Tuesday, February 9, 2016 / Notices 

1 15 U.S.C. 78s(b)(1). 

2 15 U.S.C. 78a. 

3 17 CFR 240.19b–4. 

4See Securities Exchange Act Release No. 56251 

(August 14, 2007), 72 FR 46523 (August 20, 2007) 

(SR–Amex–2004–27) (Order approving listing of 

Fixed Return Options (‘‘FROs’’)); see also Securities 

Exchange Act Release No. 71957 (April 16, 2014), 

79 FR 22563 (April 22, 2014) (SR–NYSEMKT– 

2014–06) (Order approving name change from FROs 

to Binary Return Derivatives (ByRDs) and re-launch 

of these products, with certain modification, and 

amending Obvious Errors rules to include ByRDs). 

5See proposed Rules 5.82(b)(1). 

57(b) persons. Thus, the issuance of 

shares of Restricted Stock could be 

deemed to involve a joint transaction 

involving a BDC and a 57(b) person in 

contravention of section 57(a)(4). Rule 

17d–1(b) provides that, in considering 

relief pursuant to the rule, the 

Commission will consider (i) whether 

the participation of the company in a 

joint enterprise is consistent with the 

Act’s policies and purposes and (ii) the 

extent to which that participation is on 

a basis different from or less 

advantageous than that of other 

participants. 

8. The Company requests an order 

pursuant to section 57(a)(4) and rule 

17d–1 to permit the Company to grant 

shares of Restricted Stock pursuant to 

the Plan. The Company states that the 

Plan, although benefiting the 

Participants and the Company in 

different ways, is in the interests of the 

Company’s stockholders because the 

Plan will help align the interests of the 

Company’s employees and officers with 

those of its stockholders, which will 

encourage conduct on the part of those 

employees and officers designed to 

produce a better return for the 

Company’s stockholders. 

Applicant’s Conditions 

Applicant agrees that the order 

granting the requested relief will be 

subject to the following conditions: 

1. The Plan will be authorized by the 

Company’s stockholders. 

2. Each issuance of Restricted Stock to 

a Participant will be approved by the 

required majority, as defined in section 

57(o) of the Act, of the Company’s 

directors on the basis that such issuance 

is in the best interest of the Company 

and its stockholders. 

3. The amount of voting securities 

that would result from the exercise of all 

of the Company’s outstanding warrants, 

options, and rights, together with any 

Restricted Stock issued pursuant to the 

Plan, at the time of issuance shall not 

exceed 25% of the outstanding voting 

securities of the Company, except that if 

the amount of voting securities that 

would result from the exercise of all of 

the Company’s outstanding warrants, 

options, and rights issued to the 

Company’s directors, officers, and 

employees, together with any Restricted 

Stock issued pursuant to the Plan, 

would exceed 15% of the outstanding 

voting securities of the Company, then 

the total amount of voting securities that 

would result from the exercise of all 

outstanding warrants, options, and 

rights, together with any Restricted 

Stock issued pursuant to the Plan, at the 

time of issuance shall not exceed 20% 

of the outstanding voting securities of 

the Company. 

4. The maximum amount of shares of 

Restricted Stock that may be issued 

under the Plan will be 10% of the 

outstanding shares of common stock of 

the Company on the effective date of the 

Plan plus 10% of the number of shares 

of the Company’s common stock issued 

or delivered by the Company (other than 

pursuant to compensation plans) during 

the term of the Plan. 

5. The Board will review the Plan at 

least annually. In addition, the Board 

will review periodically the potential 

impact that the issuance of Restricted 

Stock under the Plan could have on the 

Company’s earnings and NAV per share, 

such review to take place prior to any 

decisions to grant Restricted Stock 

under the Plan, but in no event less 

frequently than annually. Adequate 

procedures and records will be 

maintained to permit such review. The 

Board will be authorized to take 

appropriate steps to ensure that the 

grant of Restricted Stock under the Plan 

would not have an effect contrary to the 

interests of the Company’s stockholders. 

This authority will include the authority 

to prevent or limit the granting of 

additional Restricted Stock under the 

Plan. All records maintained pursuant 

to this condition will be subject to 

examination by the Commission and its 

staff. 

For the Commission, by the Division of 

Investment Management, under delegated 

authority. 

Robert W. Errett, 

Deputy Secretary. 

[FR Doc. 2016–02442 Filed 2–8–16; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–77044; File No. SR– 

NYSEArca–2016–16] 

Self-Regulatory Organizations; NYSE 

Arca, Inc.; Notice of Filing and 

Immediate Effectiveness of Proposed 

Rule Change To List and Trade Binary 

Return Derivatives 

February 3, 2016. 

Pursuant to Section 19(b)(1) 1 of the 

Securities Exchange Act of 1934 (the 

‘‘Act’’),2 and Rule 19b–4 thereunder,3

notice is hereby given that on January 

27, 2016, NYSE Arca, Inc. (the 

‘‘Exchange’’ or ‘‘NYSE Arca’’) filed with 

the Securities and Exchange 

Commission (the ‘‘Commission’’) the 

proposed rule change as described in 

Items I and II below, which Items have 

been prepared by the self-regulatory 

organization. The Commission is 

publishing this notice to solicit 

comments on the proposed rule change 

from interested persons. 

I. Self-Regulatory Organization’s 

Statement of the Terms of the Substance 

of the Proposed Rule Change 

The Exchange proposes to list and 

trade Binary Return Derivatives 

(‘‘ByRDs’’). The proposed rule change is 

available on the Exchange’s Web site at 

www.nyse.com, at the principal office of 

the Exchange, and at the Commission’s 

Public Reference Room. 

II. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

In its filing with the Commission, the 

self-regulatory organization included 

statements concerning the purpose of, 

and basis for, the proposed rule change 

and discussed any comments it received 

on the proposed rule change. The text 

of those statements may be examined at 

the places specified in Item IV below. 

The Exchange has prepared summaries, 

set forth in sections A, B, and C below, 

of the most significant parts of such 

statements. 

A. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

The Exchange proposes to list and 

trade ByRDs. The Exchange proposes to 

model its ByRDs rules after the 

approved rules of another options 

exchange—namely NYSE MKT LLC 

(‘‘NYSE MKT’’).4

ByRDs Generally 

ByRDs are European-style option 

contracts on individual stocks, 

exchange-traded funds (‘‘ETFs’’) and 

Index-Linked Securities that have a 

fixed return in cash based on a set strike 

price; satisfy specified listing criteria; 

and may only be exercised at expiration 

pursuant to the Rules of the Options 

Clearing Corporation (the ‘‘OCC’’).5

ByRDs are binary options and, as such, 

mstockstill on DSK4VPTVN1PROD with NOTICES