[Federal Register Volume 75, Number 175 (Friday, September 10, 2010)]
[Notices]
[Pages 55372-55376]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-22622]



[[Page 55372]]

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SECURITIES AND EXCHANGE COMMISSION

[Investment Company Act Release No. 29409; File No. 813-359]


Tudor Employee Investment Fund LLC and Tudor Investment 
Corporation; Notice of Application

September 3, 2010.
AGENCY: Securities and Exchange Commission (``Commission'').

ACTION: Notice of an application for an order under sections 6(b) and 
6(e) of the Investment Company Act of 1940 (the ``Act'') granting an 
exemption from all provisions of the Act, except section 9 and sections 
36 through 53, and the rules and regulations under those sections. With 
respect to sections 17 and 30 of the Act, and the rules and regulations 
thereunder, and rule 38a-1 under the Act, the exemption is limited as 
set forth in the application.

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SUMMARY: Summary of Application: Applicants request an order to exempt 
certain limited liability companies and other investment vehicles 
formed for the benefit of eligible employees of Tudor Investment 
Corporation (``Tudor'') and its affiliates from certain provisions of 
the Act. Each limited liability company and other investment vehicle 
will be an ``employees' securities company'' within the meaning of 
section 2(a)(13) of the Act.
    Applicants: Tudor Employee Investment Fund LLC (``Investment 
Fund'') and Tudor.

DATES: Filing Dates: The application was filed on December 6, 2005, and 
amended on August 22, 2007, June 9, 2008, June 26, 2009, June 25, 2010 
and September 1, 2010.
    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 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 September 28, 2010, and should be accompanied by proof of 
service on applicants, in the form of an affidavit or, for lawyers, a 
certificate of service. Hearing requests should state the nature of the 
writer's interest, 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, 1275 King Street, 
Greenwich, CT 06831.

FOR FURTHER INFORMATION CONTACT: Jean E. Minarick, Senior Counsel, at 
(202) 551-6811 or Janet M. Grossnickle, Assistant Director, at (202) 
551-6821 (Division of Investment Management, Office of Investment 
Company Regulation).

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.

Applicants' Representations

    1. Tudor, a Delaware corporation, is registered with the Commodity 
Futures Trading Commission (``CFTC'') as a commodity pool operator and 
commodity trading advisor, and is a member of the U.S. National Futures 
Association in such capacities. Applicants represent that Tudor is 
exempt from registration as an investment adviser with the Commission 
under the Investment Advisers Act of 1940 (the ``Advisers Act''). Tudor 
and its ``affiliates,'' as defined in rule 12b-2 under the Securities 
Exchange Act of 1934 (``Exchange Act''), are referred to collectively 
as the ``Tudor Group'' and each entity within the Tudor Group is 
referred to individually as a ``Tudor Group Entity.''
    2. Tudor has established the Investment Fund as a Delaware limited 
liability company and may in the future establish additional pooled 
investment vehicles identical in all material respects to the 
Investment Fund (other than investment objectives and strategies and 
form of organization) (the ``Subsequent Funds'' and collectively with 
the Investment Fund, the ``Funds,'' and each, a ``Fund'') for the 
benefit of current or former key employees, officers, directors and 
current consultants of the Tudor Group and certain entities and 
individuals affiliated with employees of the Tudor Group who invest in 
a Fund (``Fund Investors''). The Funds are designed primarily to create 
capital building opportunities that are competitive with those at other 
investment management firms and to facilitate the recruitment and 
retention of high caliber professionals. Tudor will control each Fund 
within the meaning of the Act.
    3. Each Fund will operate as a non-diversified closed-end 
management investment company. Each Fund will be an ``employees' 
securities company'' within the meaning of section 2(a)(13) of the Act. 
Each Fund will be established to enable Eligible Investors, as defined 
below, through their investment in a Fund to achieve long-term capital 
appreciation through investment in affiliated and non-affiliated 
private investment funds (each an ``Underlying Fund''), certain of 
which are advised by a Tudor Group Entity.\1\ The Underlying Funds in 
which a Fund invests will be either investment companies excluded from 
registration under the Act or funds not primarily engaged in the 
business of investing, reinvesting, or trading securities, e.g., 
commodity pools. The investment objectives and policies for each Fund 
may vary from Fund to Fund. Participation in the Funds is voluntary.
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    \1\ Applicants are not requesting any exemption from any 
provision of the Act or any rule thereunder that may govern a Fund's 
eligibility to invest in an Underlying Fund relying on section 
3(c)(1) or 3(c)(7) of the Act or any Underlying Fund's status under 
the Act.
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    4. A Tudor Group Entity will serve as the manager (``Manager'') of 
each Fund.\2\ The same or a different Tudor Group Entity will serve as 
the investment adviser (each an ``Investment Adviser'') of each Fund. 
The Investment Adviser will register as an investment adviser under the 
Advisers Act, if required under applicable law.
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    \2\ A ``Manager'' is either the general partner of any Fund 
organized as a limited partnership or the managing member of any 
Fund organized as a limited liability company.
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    5. The Tudor Group, the Manager and any other person acting for or 
on behalf of a Fund shall act in the best interest of the Fund and its 
Fund Investors. Whenever the Tudor Group, the Manager or any other 
person acting for or on behalf of the Funds is required or permitted to 
make a decision, take or approve an action, or omit to do any of the 
foregoing in such person's discretion, then that person shall exercise 
such discretion in accordance with reasonableness and good faith and 
any fiduciary duties owed to the Fund and its Fund Investors. The 
organizational documents for, and any other contractual arrangement 
regarding, the Funds will not contain any provision which protects or 
purports to protect the Tudor Group, the Manager or their delegates 
against any liability to a Fund or its Fund Investors to which such 
person would otherwise be subject by reason of willful misfeasance, bad 
faith, or gross negligence in the performance of such person's duties, 
or by reason of such person's reckless disregard of such person's 
obligations and duties under

[[Page 55373]]

such contract or organizational documents.
    6. Interests in the Funds (``Interests'') will be offered without 
registration in reliance on section 4(2) of the Securities Act of 1933 
(``Securities Act'') or Regulation D under the Securities Act 
(``Regulation D''), and will be offered and sold only to Eligible 
Investors. An ``Eligible Investor'' is defined as (a) any Tudor Group 
Entity that meets the standards set forth below and (b) an officer, 
director, or employee of the Tudor Group who has been employed by a 
Tudor Group Entity for at least one year and ``Consultants'' \3\ of the 
Tudor Group (collectively, ``Tudor Employees''), each of which meets 
the standards, as applicable, set forth below. Each Eligible Investor 
must have, in the reasonable belief of the Manager, the knowledge, 
sophistication and experience in business and financial matters to be 
capable of evaluating the merits and risks of investing in a Fund and 
be able to bear the economic risk of such investment, and be able to 
afford a complete loss of the investment.
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    \3\ A ``Consultant'' is a person or entity who is on retainer 
with a Tudor Group Entity at the time Interests are offered to the 
Consultant to provide services and professional expertise to a Tudor 
Group Entity on an ongoing basis as a regular consultant or as a 
business or legal adviser and who shares a community of interest 
with the Tudor Group and its employees.
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    7. To be a Tudor Employee, an individual must be (a) an accredited 
investor under rule 501(a)(5) or 501(a)(6) of Regulation D under the 
Securities Act and (b) a ``qualified eligible person'' under rule 4.7 
promulgated by the CFTC. A Tudor Employee is a ``qualified eligible 
person'' under CFTC rule 4.7(a)(2)(vii) if he or she is a 
``knowledgeable employee,'' as defined in rule 3c-5 under the Act, of a 
Tudor Group Entity. Any Tudor Group Entity including the Manager and 
the Investment Adviser will be required to be accredited investors 
under Regulation D under the Securities Act to be an Eligible Investor.
    8. The investment objectives and strategies for each Fund will be 
set forth in offering documents relating to the Interests offered by 
the Fund. Prior to being invited to participate in a Fund, each 
Eligible Investor will receive a copy of the offering documents and the 
operating agreement (or other organizational document) of the Fund or 
an offering memorandum, which will set forth all the terms of 
participation in the Fund. The Managers will send an annual report to 
each Fund Investor not later than 120 days after the close of the 
fiscal year, which will contain financial statements of the Fund that 
have been audited by independent accountants. For purposes of this 
requirement ``audit'' shall have the meaning defined in rule 1-02(d) of 
Regulation S-X. In addition, Fund Investors will receive at least 
annually all information necessary to enable the Fund Investors to 
prepare their Federal and State income tax returns.
    9. Interests in the Funds will be non-transferable by a Fund 
Investor except with the express consent of the Manager. No person will 
be admitted as a Fund Investor unless the person is an Eligible 
Investor, except that a legal representative of the estate of a 
deceased Fund Investor may hold that Fund Investor's Interest in order 
to settle the Fund Investor's estate or administer its property. No fee 
of any kind will be charged in connection with the sale of Interests.
    10. Upon termination of employment with a Tudor Group Entity, an 
Eligible Investor, other than a Consultant, who has been employed by 
the Tudor Group for at least three years will remain eligible to invest 
in a Fund or continue to hold Interests in a Fund, as applicable, at 
the discretion of the Manager of that Fund, for a period of one year 
for each full year of employment (subject to a maximum of ten years), 
and thereafter such Interests will be subject to a mandatory 
redemption. Interests held by a Consultant whose retainer has been 
terminated or expired will be subject to mandatory redemption, and 
unlike other Eligible Investors, Consultants may not invest in a Fund 
or continue to hold Interests in a Fund based on their length of 
service to the Tudor Group. Consultants no longer on retainer with a 
Tudor Group Entity will no longer be Eligible Investors. The repurchase 
price for Interests will be based on net asset value pursuant to the 
Fund's organization and offering documents.
    11. A Fund may leverage its investments in any of the Underlying 
Funds by entering into borrowing arrangements with third parties, 
including a Tudor Group Entity, in order to gain greater exposure to 
the Underlying Funds. Each such Fund loan will be made at an interest 
rate no less favorable than that which could be obtained on an arm's 
length basis. A Fund will not borrow from any person if the borrowing 
would cause any person not named in section 2(a)(13) of the Act to own 
outstanding securities of the Fund (other than short-term paper). Any 
loan made to a Fund will be non-recourse to the Fund Investors.
    12. A Fund will not acquire any security issued by a registered 
investment company if, immediately after the acquisition, the Fund 
would own more than 3% of the outstanding voting stock of the 
registered investment company.
    13. Neither the Manager nor any Investment Adviser will receive any 
management fees from a Fund. An Investment Adviser may receive 
compensation for acting as an investment adviser to an Underlying Fund, 
but will waive any such compensation it receives directly related to a 
Fund's investment in such Underlying Funds.

Applicants' Legal Analysis

    1. Section 6(b) of the Act provides, in part, that the Commission 
will exempt employees' securities companies from the provisions of the 
Act to the extent that the exemption is consistent with the protection 
of investors. Section 6(b) provides that the Commission will consider, 
in determining the provisions of the Act from which the company should 
be exempt, the company's form of organization and capital structure, 
the persons owning and controlling its securities, the price of the 
company's securities and the amount of any sales load, how the 
company's funds are invested, and the relationship between the company 
and the issuers of the securities in which it invests. Section 2(a)(13) 
defines an employees' securities company, in relevant part, as any 
investment company all of whose securities (other than short-term 
paper) are beneficially owned (a) by current or former employees, or 
persons on retainer, of one or more affiliated employers, (b) by 
immediate family members of such persons, or (c) by such employer or 
employers, together with any of the persons in (a) or (b).
    2. Section 7 of the Act generally prohibits investment companies 
that are not registered under section 8 of the Act from selling or 
redeeming their securities. Section 6(e) provides that, if, in 
connection with any order exempting an investment company from any 
provision of section 7, certain provisions of the Act, as specified by 
the Commission, will be applicable to the company and other persons 
dealing with the company as though the company were registered under 
the Act. Applicants request an order under sections 6(b) and 6(e) of 
the Act exempting the Funds from all provisions of the Act, except 
section 9 and sections 36 through 53 of the Act, and the rules and 
regulations under the Act. With respect to sections 17 and 30 of the 
Act, and the rules and regulations thereunder, and rule 38a-1 under the 
Act, the exemption is limited as set forth in the application.

[[Page 55374]]

    3. Section 17(a) generally prohibits any affiliated person of a 
registered investment company, or any affiliated person of an 
affiliated person, acting as principal, from knowingly selling or 
purchasing any security or other property to or from the company. 
Applicants request an exemption from section 17(a) to permit: (a) A 
Tudor Group Entity or a Third Party Fund \4\ (or any affiliated person 
of a Third Party Fund), acting as principal, to engage in any 
transaction directly or indirectly with any Fund or any entity 
controlled by the Fund; (b) a Fund to invest in or engage in any 
transaction with any entity, acting as principal (i) in which the Fund, 
any company controlled by the Fund or any Tudor Group Entity or a Third 
Party Fund has invested or will invest or (ii) with which the Fund, any 
company controlled by the Fund, or a Tudor Group Entity or Third Party 
Fund is or will otherwise become affiliated or (c) a partner or other 
investor in any entity in which a Fund invests, acting as principal, to 
engage in transactions directly or indirectly with a Fund or any 
company controlled by a Fund.
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    \4\ An investment fund or separate account organized for the 
benefit of investors who are not affiliated with a Tudor Group 
Entity and over which a Tudor Group Entity exercises investment 
discretion (the ``Third Party Funds'').
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    4. Applicants submit that an exemption from section 17(a) is 
consistent with the protection of investors and the purposes of the 
Act. Applicants state that the Fund Investors in each Fund will be 
informed of the possible extent of the Fund's dealings with Tudor Group 
Entities or Third Party Funds and of the potential conflicts of 
interest that may exist. Applicants also state that, as professionals 
engaged in the investment management business, the Fund Investors will 
be able to understand and evaluate the attendant risks. Applicants 
assert that the community of interest among the Fund Investors and the 
Tudor Group will serve to reduce any risk of abuse in transactions 
involving a Fund and a Tudor Group Entity.
    5. Section 17(d) of the Act and rule 17d-1 under the Act prohibit 
any affiliated person of a registered investment company, or any 
affiliated person of such person, acting as principal, from 
participating in any joint arrangement unless authorized by the 
Commission. Applicants request relief to permit affiliated persons of 
each Fund, or affiliated persons of such persons, to participate in, or 
effect any transaction in connection with, any joint arrangement in 
which the Fund or an entity controlled by the Fund is a participant.
    6. Applicants assert that compliance with section 17(d) would cause 
a Fund to forego investment opportunities simply because a Fund 
Investor, the Manager, or any other affiliated person of the Fund (or 
any affiliate of the affiliated person) had made a similar investment. 
Applicants also submit that the types of investment opportunities 
considered by a Fund often require each investor to make funds 
available in an amount that may be substantially greater than what a 
Fund may make available on its own. Applicants contend that, as a 
result, the only way in which a Fund may be able to participate in 
these opportunities may be to co-invest with other persons, including 
its affiliates. Applicants assert that the flexibility to structure co-
investments and joint investments will not involve abuses of the type 
section 17(d) and rule 17d-1 were designed to prevent.
    7. Co-investments with Third Party Funds will not be subject to 
condition 3 below. Applicants note that, if a Tudor Group Entity 
invests its own capital in Third Party Fund investments, investments by 
the Tudor Group Entity will be subject to substantially the same terms 
as those applicable to the Third Party Fund. Applicants believe it is 
important that the interests of the Third Party Fund take priority over 
the interests of the Funds, and that the Third Party Fund not be 
burdened or otherwise affected by activities of the Funds. In addition, 
applicants assert that the relationship of a Fund to a Third Party Fund 
is fundamentally different from a Fund's relationship to Tudor Group 
Entities. Applicants contend that the focus of, and the rationale for, 
the protections contained in the requested relief are to protect the 
Funds from any overreaching by any Tudor Group Entity in the employer/
employee context, whereas the same concerns are not present with 
respect to the Funds and a Third Party Fund.
    8. Section 17(f) of the Act designates the entities that may act as 
investment company custodians, and rule 17f-2 under the Act allows an 
investment company to act as self-custodian. Applicants request an 
exemption from section 17(f) and rule 17f-2 to permit the following 
exceptions from the requirements of rule 17f-2: (a) A Fund's 
investments may be kept in the locked files of its Investment Adviser; 
(b) for purposes of paragraph (d) of the rule, (i) employees of the 
Investment Adviser will be deemed to be employees of the Fund, (ii) 
officers or managers of the Investment Adviser of a Fund will be deemed 
to be officers of the Fund, and (iii) the Investment Adviser of a Fund 
or its executive committee will be deemed to be the board of directors 
of the Fund and (c) in place of the verification procedure under 
paragraph (f) of the rule, verification will be effected quarterly by 
two high level officers of the Investment Adviser. With respect to the 
Funds, Applicants expect that many of their investments will be 
evidenced only by partnership or operating agreements, subscription 
agreements or similar documents, rather than by negotiable certificates 
that could be misappropriated. Applicants assert that for such a Fund 
these instruments are most suitably kept in the Investment Adviser's 
files, where they can be referred to as necessary.
    9. Section 17(g) of the Act and rule 17g-1 under the Act generally 
require the bonding of officers and employees of a registered 
investment company who have access to its securities or funds. The rule 
requires that the board of directors of an investment company satisfy 
the fund governance standards defined in rule 0-1(a)(7) (the ``Fund 
Governance Standards''). Applicants request an exemption from section 
17(g) and rule 17g-1 to permit the Manager to take such actions and 
make determinations set forth in the rule. Applicants state that, 
because the Manager will be an interested person of each Fund, a Fund 
could not comply with rule 17g-1 without the requested relief. 
Specifically, each Fund will comply with rule 17g-1 by having the 
Manager take such actions and make such approvals as are set forth in 
rule 17g-1. Applicants also request an exemption from the requirements 
of rule 17g-1(g) and (h) relating to the filing of copies of fidelity 
bonds and related information with the Commission and the provision of 
notices to the board of directors and paragraph (h) of rule 17g-1 
relating to the appointment of a person to make the filings and provide 
the notices required by paragraph (g) and paragraph (j)(3) of rule 17g-
1 relating to compliance with the Fund Government Standards. Applicants 
believe the filing requirements are burdensome and unnecessary as 
applied to the Funds. The Manager will maintain the materials otherwise 
required to be filed with the Commission by rule 17g-1(g) and agrees 
that all material will be subject to examination by the Commission and 
its staff. The Manager will designate a person to maintain the records 
otherwise required to be filed with the Commission under paragraph (g) 
of the rule. Applicants also state that the notices otherwise required 
to be given to the board of directors would be unnecessary as the Funds 
will not have

[[Page 55375]]

boards of directors. Each Fund will comply with all other requirements 
of rule 17g-1. In light of the purpose of the Funds and the community 
of interest among the Funds and between the Funds and the Managers, the 
applicants believe that little purpose would be served by the 
requirement even if it were feasible.
    10. Section 17(j) of the Act and paragraph (b) of rule 17j-1 under 
the Act make it unlawful for certain enumerated persons to engage in 
fraudulent or deceptive practices in connection with the purchase or 
sale of a security held or to be acquired by a registered investment 
company. Rule 17j-1 also requires that every registered investment 
company adopt a written code of ethics and that every access person of 
a registered investment company report personal securities 
transactions. Applicants request an exemption from the provisions of 
rule 17j-1, except for the anti-fraud provisions of paragraph (b), 
because they are unnecessarily burdensome as applied to the Funds. In 
light of the purpose of the Funds and the community of interest among 
the Funds and between the Funds and the Managers, the applicants 
believe that little purpose would be served by this requirement even if 
it were feasible.
    11. Applicants request an exemption from the requirements in 
sections 30(a), 30(b) and 30(e) of the Act, and the rules under those 
sections, that registered investment companies prepare and file with 
the Commission and mail to their shareholders certain periodic reports 
and financial statements. Applicants contend that the forms prescribed 
by the Commission for periodic reports have little relevance to the 
Funds and would entail administrative and legal costs that outweigh any 
benefit to the Fund Investors. Applicants request exemptive relief to 
the extent necessary to permit each Fund to report annually to its Fund 
Investors. Applicants also request also an exemption from section 30(h) 
of the Act to the extent necessary to exempt the Managers of each Fund, 
and any other person who may be deemed to be a member of an advisory 
board of a Fund, from filing Forms 3, 4, and 5 under section 16(a) of 
the Exchange Act with respect to their ownership of Interests in a 
Fund. Applicants assert that, because there will be no trading market 
and the transfers of Interests will be severely restricted, these 
filings are unnecessary for the protection of investors and burdensome 
to those required to make them.
    12. Rule 38a-1 requires investment companies to adopt, implement 
and periodically review written policies reasonably designed to prevent 
violation of the Federal securities laws and to appoint a chief 
compliance officer. Each Fund will comply with rule 38a-1(a), (c) and 
(d), except that (a) because the Funds do not have boards of directors, 
the Manager of each Fund will fulfill the responsibilities assigned to 
a Fund's board of directors under the rule, and (b) because a Manager 
would be considered an interested person of the Fund, approval by a 
majority of disinterested directors required by rule 38a-1 will not be 
obtained. In addition, the Funds will comply with the requirement in 
Rule 38a-1(a)(4)(iv) that the chief compliance officer meet with the 
independent directors by having the chief compliance officer meet with 
the Manager.

Applicants' Conditions

    Applicants agree that any order granting the requested relief will 
be subject to the following conditions:
    1. Each proposed transaction involving a Fund otherwise prohibited 
by section 17(a) or section 17(d) of the Act and rule 17d-1 under the 
Act to which a Fund is a party (each, a ``Section 17 Transaction'') 
will be effected only if its Manager, in consultation with its 
Investment Adviser, determines that:
    (a) The terms of the Section 17 Transaction, including the 
consideration to be paid or received, are fair and reasonable to the 
Fund Investors and do not involve overreaching of such Fund or its Fund 
Investors on the part of any person concerned; and
    (b) The Section 17 Transaction is consistent with the interests of 
the Fund Investors, the Fund's organizational documents and the Fund's 
reports to its Fund Investors.
    In addition, the Manager of each Fund will record and preserve a 
description of all Section 17 Transactions, the Manager's and the 
Investment Adviser's findings, the information or materials upon which 
their findings are based and the basis therefor. All such records will 
be maintained for the life of a Fund and at least six years thereafter, 
and will be subject to examination by the Commission and its staff.\5\
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    \5\ Each Fund will preserve the accounts, books, and other 
documents required to be maintained in an easily accessible place 
for the first two years.
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    2. The Manager of each Fund, in consultation with the Investment 
Adviser of each Fund, will adopt, and periodically review and update, 
procedures designed to ensure that reasonable inquiry is made, before 
the consummation of any Section 17 Transaction, with respect to the 
possible involvement in the transaction of any affiliated person or 
promoter of or principal underwriter for such Fund, or any affiliated 
person of an affiliated person, promoter, or principal underwriter.
    3. The Investment Adviser of a Fund will not invest the funds of 
such Fund in any investment in which an ``Affiliated Co-Investor'' (as 
defined below) has acquired or proposes to acquire the same class of 
securities of the same issuer and where the investment involves a joint 
enterprise or other joint arrangement within the meaning of rule 17d-1 
in which the Fund and an Affiliated Co-Investor are participants, 
unless any such Affiliated Co-Investor, prior to disposing of all or 
part of its investment, (a) gives the Investment Adviser sufficient, 
but not less than one day's, notice of its intent to dispose of its 
investment; and (b) refrains from disposing of its investment unless 
the Fund has the opportunity to dispose of the Fund's investment prior 
to or concurrently with, on the same terms as, and pro rata with the 
Affiliated Co-Investor. The term ``Affiliated Co-Investor'' with 
respect to a Fund means any person who is: (a) An ``affiliated 
person,'' as such term is defined in section 2(a)(3) of the Act, of the 
Fund (other than a Third Party Fund); (b) a Tudor Group Entity; (c) an 
officer, director or employee of the Tudor Group; or (d) an entity 
(other than a Third Party Fund) in which a Tudor Group Entity acts as a 
general partner or has a similar capacity to control the sale or other 
disposition of the entity's securities. The restrictions contained in 
this condition, however, will not be deemed to limit or prevent the 
disposition of an investment by an Affiliated Co-Investor: (a) To its 
direct or indirect wholly-owned subsidiary, to any company (a 
``Parent'') of which the Affiliated Co-Investor is a direct or indirect 
wholly-owned subsidiary, or to a direct or indirect wholly-owned 
subsidiary of its Parent; (b) to immediate family members of the 
Affiliated Co-Investor or a trust or other investment vehicle 
established for any Affiliated Co-Investor or any such immediate family 
member; or (c) when the investment is comprised of securities that are 
(i) listed on any exchange registered under section 6 of the Exchange 
Act; (ii) NMS stocks pursuant to section 11A(a)(2) of the Exchange Act 
and rule 600(a) of Regulation NMS thereunder; (iii) government 
securities as defined in section 2(a)(16) of the Act or other 
securities that meet the definition of ``Eligible Security'' in rule

[[Page 55376]]

2a-7 under the Act; or (iv) listed on or traded on any foreign 
securities exchange or board of trade that satisfies regulatory 
requirements under the law of the jurisdiction in which such foreign 
securities exchange or board of trade is organized similar to those 
that apply to a national securities exchange or a national market 
system for securities.
    4. Each Fund and its Manager will maintain and preserve, for the 
life of each Fund and at least six years thereafter, all accounts, 
books, and other documents constituting the record forming the basis 
for the audited financial statements that are to be provided to the 
Fund Investors, and each annual report of such Fund required to be sent 
to the Fund Investors, and agree that all such records will be subject 
to examination by the Commission and its staff.\6\
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    \6\ Each Fund will preserve the accounts, books and other 
documents required to be maintained in an easily accessible place 
for the first two years.
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    5. The Manager will send to each Fund Investor who had an Interest 
in the Fund, at any time during the fiscal year then ended, Fund 
financial statements that have been audited by that Fund's independent 
accountants. At the end of each fiscal year, the Manager will make a 
valuation or have a valuation made of all of the assets of the Fund as 
of such fiscal year end in a manner consistent with customary practice 
with respect to the valuation of assets of the kind held by the Fund. 
In addition, within 120 days after the end of each fiscal year of the 
Fund, the Manager of a Fund shall send a report to each person who was 
a Fund Investor at any time during the fiscal year then ended setting 
forth tax information necessary for the preparation by the Fund 
Investor of his or her Federal and State income tax returns and a 
report of the investment activities of the Fund during that year.
    6. Whenever a Fund makes a purchase from or sale to an entity that 
is affiliated with the Fund by reason of a Tudor Group director, 
officer, or employee (a) serving as an officer, director, general 
partner or investment adviser of the entity or (b) having a 5% or more 
investment in the entity, that individual will not participate in the 
determination by the Fund of whether or not to effect the purchase or 
sale.

    For the Commission, by the Division of Investment Management, 
under delegated authority.
Florence E. Harmon,
Deputy Secretary.
[FR Doc. 2010-22622 Filed 9-9-10; 8:45 am]
BILLING CODE 8010-01-P