[Federal Register: October 17, 2007 (Volume 72, Number 200)]
[Notices]
[Page 58910-58916]
[DOCID:fr17oc07-116]

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SECURITIES AND EXCHANGE COMMISSION

[Investment Company Act Release No. 28012; 813-326]

Raymond James Employee Investment Fund I, L.P., et al.; Notice of
Application

October 11, 2007.
AGENCY: Securities and Exchange Commission (``Commission'').

ACTION: Notice of 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 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.

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Summary of Application: Applicants request an order to exempt certain
limited partnerships and other investment vehicles formed for the
benefit of eligible employees of

Raymond James Financial, Inc. (``RJF'') and its affiliates from certain
provisions of the Act. Each partnership or other investment vehicle
will be an ``employees'' securities company'' within the meaning of
section 2(a)(13) of the Act.

Applicants: Raymond James Employee Investment Fund I, L.P. and Raymond
James Employee Investment Fund II, L.P. (together, the ``Initial
Partnerships''), RJF, and RJEIF, Inc.

Filing Dates: The application was filed on February 21, 2001, and
amended on October 5, 2007.

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 November 5, 2007, and should be accompanied by proof of service
on applicant, 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, The Raymond James
Financial Center, 880 Carillon Parkway, St. Petersburg, Florida 33716.

FOR FURTHER INFORMATION CONTACT: Laura J. Riegel, Senior Counsel, at
(202) 551-6873, or Julia K. Gilmer, Branch Chief, at<PHONE_NUMBER>
(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 for a fee at the
Commission's Public Reference Branch, 100 F Street, NE., Washington DC
20549-0102 (telephone<PHONE_NUMBER>).

Applicants' Representations

    1. RJF is a diversified financial services holding company
organized under the laws of Florida, whose subsidiaries engage
primarily in investment and financial planning, including securities
and insurance brokerage, investment banking, asset management, banking
and cash management and trust services. RJF and its ``Affiliates,'' as
defined in rule 12b-2 under the Securities Exchange Act of 1934 (the
``1934 Act''), are referred to collectively as ``Raymond James.''
    2. The Initial Partnerships are limited partnerships organized
under the laws of the state of Delaware. RJEIF, Inc. serves as the
general partner and investment adviser to the Initial Partnerships.
Applicants may offer additional investment vehicles identical in all
material respects (other than investment objectives and strategies and
form of organization) that may be offered in the future to the same
class of investors as those investing in the Initial Partnerships
(together with the Initial Partnerships, the ``Partnerships''). Each
Partnership will be a limited partnership or other investment vehicle
formed as an ``employees' securities company'' within the meaning of
section 2(a)(13) and will operate as a closed-end, non-diversified,
management investment company.\1\ Each Partnership has been established
or will be established primarily for the benefit of highly compensated
employees of Raymond James as part of a program designed to create
capital building opportunities that are competitive with those at other
investment banking firms and to facilitate recruitment of high caliber
professionals.
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    \1\ Applicants also may implement a pretax plan arrangement
(``Pretax Plan''). In this case, no investment vehicle will be
formed with respect to such Pretax Plan. Pursuant to a Pretax Plan,
Raymond James will enter into arrangements with certain Eligible
Employees, as defined below, of Raymond James, which will generally
provide that (a) an Eligible Employee will defer a portion of his or
her compensation payable by Raymond James, (b) such deferred
compensation will be treated as having been notionally invested in
investments designated for these purposes pursuant to the specific
compensation plan, and (c) an Eligible Employee will be entitled to
receive cash, securities or other property at the times and in the
amounts set forth in the specific compensation plan, where the
aggregate amount received by such Eligible Employee would be based
upon the investment performance of the investments designated for
these purposes pursuant to such compensation plan. The Pretax Plan
will not actually purchase or sell any securities. Raymond James
expects to offer, through Pretax Plans, economic benefits comparable
to what would have been offered in an arrangement where an
investment vehicle is formed. For purposes of the application, a
Partnership will be deemed to be formed with respect to each Pretax
Plan and each reference in the application to ``Partnership,''
``capital contribution,'' ``General Partner,'' ``Limited Partner,''
``loans,'' and ``Interest'' will be deemed to refer to the Pretax
Plan, the notional capital contribution to the Pretax Plan, Raymond
James, a participant of the Pretax Plan, notional loans, and
participation rights in the Pretax Plan, respectively.
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    3. The general partner of each Partnership will be an Affiliate of
RJF (``General Partner''). Any partner in a Partnership other than a
General Partner is a ``Limited Partner'' or ``Participant.'' The
General Partner will manage, operate, and control each of the
Partnerships. The General Partner will be authorized to delegate
investment management responsibility only to a Raymond James entity or
a committee of Raymond James employees. The ultimate responsibility for
the Partnerships' investments will remain with the General Partner. Any
Raymond James entity that is delegated the responsibility of making
investment decisions for a Partnership will register as an investment
adviser under the Investment Advisers Act of 1940 (the ``Advisers
Act'') if required under applicable law. The General Partner, Raymond
James or any employee of the General Partner or Raymond James may be
entitled to receive a performance-based fee (such as a ``carried
interest'') based on the gains and losses of the investment program or
of the Partnership's investment portfolio.\2\ All Partnership
investments are referred to herein collectively as ``Portfolio
Investments.''
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    \2\ A ``carried interest'' is an allocation to the General
Partner, Limited Partner or the Raymond James entity acting as the
investment adviser to a Partnership based on net gains in addition
to the amount allocable to such entity in proportion to its capital
contributions. A General Partner, Limited Partner or Raymond James
entity that is registered as an investment adviser under the
Advisers Act may charge a carried interest only if permitted by rule
205-3 under the Advisers Act. Any carried interest paid to a General
Partner, Limited Partner or Raymond James entity that is not
registered under the Advisers Act also will comply with rule 205-3
as if such General Partner, Limited Partner or Raymond James entity
were so registered.
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    4. Interests in the Partnerships (``Interests'') will be offered
without registration in reliance on section 4(2) of the Securities Act
of 1933 (the ``Securities Act''), or Regulation D under the Securities
Act, and will be sold only to ``Eligible Employees'' and ``Qualified
Participants,'' in each case as defined below, or to Raymond James
entities.\3\ Prior to offering Interests to an Eligible Employee, the
General Partner must reasonably believe that the Eligible Employee will
be a sophisticated investor capable of understanding and evaluating the
risks of participating in the Partnership without the benefit of
regulatory safeguards.
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    \3\ If applicants implement a Pretax Plan, participation rights
in such Pretax Plan will only be offered to Eligible Employees who
are current employees or Consultants, as defined below, of Raymond
James.
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    5. An ``Eligible Employee'' is (a) an individual who is a current
or former employee, officer, director, or ``Consultant'' of Raymond
James and, except for certain individuals who manage the day-to-day
affairs of the Partnership in question (``Managing

Employees'') \4\ and a limited number of other employees of Raymond
James \5\ (collectively, ``Non-Accredited Investors''), meets the
standards of an accredited investor under rule 501(a)(6) of Regulation
D under the Securities Act, or (b) an entity that is a current or
former ``Consultant'' of Raymond James and meets the standards of an
accredited investor under rule 501(a) of Regulation D.\6\ A Partnership
may not have more than 35 Non-Accredited Investors.
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    \4\ A Managing Employee may invest in a Partnership if he or she
meets the definition of ``knowledgeable employee'' in rule 3c-
5(a)(4) under the Act with the Partnership treated as though it were
a ``Covered Company'' for purposes of the rule.
    \5\ Such employees must meet the sophistication requirements set
forth in rule 506(b)(2)(ii) of Regulation D under the Securities Act
and may be permitted to invest his or her own funds in the
Partnership if, at the time of the employee's investment in a
Partnership, he or she (a) has a graduate degree in business, law or
accounting, (b) has a minimum of five years of consulting,
investment banking or similar business experience, and (c) has had
reportable income from all sources of at least $100,000 in each of
the two most recent years and a reasonable expectation of income
from all sources of at least $140,000 in each year in which such
person will be committed to make investments in a Partnership. In
addition, such an employee will not be permitted to invest in any
year more than 10% of his or her income from all sources for the
immediately preceding year in the aggregate in such Partnership and
in all other Partnerships in which he or she has previously
invested.
    \6\ A ``Consultant'' is a person or entity whom Raymond James
has engaged on retainer to provide services and professional
expertise on an ongoing basis as a regular consultant or as a
business or legal adviser and who shares a community of interest
with Raymond James and Raymond James employees.
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    6. A ``Qualified Participant,'' is an individual or entity (a) that
is an Eligible Family Member or Qualified Investment Vehicle (in each
case as defined below) of an Eligible Employee, and (b) if the
individual or entity is purchasing an Interest from a Partnership,
comes within one of the categories of an ``accredited investor'' under
rule 501(a) of Regulation D. An ``Eligible Family Member'' is a spouse,
parent, child, spouse of child, brother, sister, or grandchild of an
Eligible Employee, including step and adoptive relationships. A
``Qualified Investment Vehicle'' is (a) a trust of which the trustee,
grantor and/or beneficiary is an Eligible Employee, (b) a partnership,
corporation or other entity controlled by an Eligible Employee, or (c)
a trust or other entity established solely for the benefit of Eligible
Family Members of an Eligible Employee.\7\
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    \7\ The inclusion of partnerships, corporations, or other
entities controlled by an Eligible Employee in the definition of
``Qualified Investment Vehicle'' is intended to enable Eligible
Employees to make investments in the Partnerships through personal
investment vehicles over which they exercise investment discretion
or vehicles the management or affairs of which they otherwise
control. In the case of a partnership, corporation, or other entity
controlled by a Consultant entity, individual participants will be
limited to senior level employees, members, or partners of the
Consultant who will be required to qualify as an ``accredited
investor'' under rule 501(a)(6) of Regulation D and who will have
access to the directors and officers of the General Partner.
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    7. The terms of a Partnership will be fully disclosed to each
Eligible Employee and, if applicable, to a Qualified Participant of the
Eligible Employee, in a partnership agreement (the ``Partnership
Agreement''), which will be furnished at the time the Eligible Employee
is invited to participate in the Partnership. Each Partnership will
send audited financial statements to each Participant within 120 days
or as soon as practicable after the end of its fiscal year, except for
any Partnership that was formed to make a single portfolio investment
(in which case audited financial statements will be prepared for either
the Partnership or the entity that is the single portfolio
investment).\8\ In addition, as soon as practicable after the end of
each tax year of a Partnership, each Participant will receive a report
showing the Participant's share of income, credits, deductions, and
other tax items.
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    \8\ If applicants implement a Pretax Plan, Eligible Employees
participating in such Pretax Plan will be furnished with a copy of
the Pretax Plan, which will set forth at a minimum the same terms of
the proposed investment program as those that would have been set
forth in a Partnership Agreement for a Partnership. Raymond James
will prepare an audited informational statement with respect to the
investments deemed to be made by such Pretax Plan, including, with
respect to each investment, the name of the portfolio company and
the amount deemed invested by such Pretax Plan in the portfolio
company. Raymond James will send each participant of such Pretax
Plan a separate statement prepared based on the audited
informational statement within 120 days after the end of the fiscal
year of Raymond James or as soon as practicable thereafter.
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    8. Interests in a Partnership will be non-transferable except with
the prior written consent of the General Partner.\9\ No person will be
admitted into a Partnership unless the person is an Eligible Employee,
a Qualified Participant of an Eligible Employee, or a Raymond James
entity. No sales load will be charged in connection with the sale of
Interests.
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    \9\ If applicants implement a Pretax Plan, an Eligible
Employee's participation rights in such Pretax Plan may not be
transferred, other than to a Qualified Participant in the event of
the Eligible Employee's death.
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    9. An Eligible Employee's interest in a Partnership may be subject
to repurchase or cancellation if: (a) The Eligible Employee's
relationship with Raymond James is terminated for cause; (b) the
Eligible Employee becomes a consultant to or joins any firm that the
General Partner determines, in its reasonable discretion, is
competitive with any business of Raymond James; or (c) the Eligible
Employee voluntarily resigns from employment with Raymond James. Upon
repurchase or cancellation, the General Partner will pay to the
Eligible Employee at least the lesser of (a) the amount actually paid
by the Eligible Employee to acquire the Interest (less prior
distributions, plus interest), and (b) the fair market value of the
Interest as determined at the time of repurchase or cancellation by the
General Partner. The terms of any repurchase or cancellation will apply
equally to any Qualified Participant of an Eligible Employee.
    10. Subject to the terms of the applicable Partnership Agreement, a
Partnership will be permitted to enter into transactions involving (a)
a Raymond James entity, (b) a portfolio company, (c) any Partner or
person or entity affiliated with a Partner, (d) an investment fund or
separate account that is organized for the benefit of investors who are
not affiliated with Raymond James and over which a Raymond James entity
will exercise investment discretion or which is sponsored by a Raymond
James entity (``Third Party Fund''), or (e) any person or entity who is
not affiliated with Raymond James and is a partner or other investor in
a Third Party Fund or a third party sponsored fund or pooled investment
vehicle that is not affiliated with Raymond James (a ``Third Party
Investor''). Prior to entering into any of these transactions, the
General Partner must determine that the terms are fair to the Partners.
    11. A Raymond James entity (including the General Partner) acting
as agent or broker may receive placement fees, advisory fees, or other
compensation from a Partnership or a portfolio company in connection
with a Partnership's purchase or sale of securities, provided that such
placement fees, advisory fees, or other compensation can be deemed to
be ``usual and customary.'' Such fees or other compensation will be
deemed ``usual and customary'' only if (a) the Partnership is
purchasing or selling securities with other unaffiliated third parties,
including Third Party Funds or Third Party Investors, who are similarly
purchasing or selling securities, (b) the fees or other compensation
being charged to the Partnership are also being charged to the
unaffiliated third parties, including Third Party Funds or Third Party
Investors, and (c) the amount of securities being purchased or sold by
the Partnership does not exceed 50% of

the total amount of securities being purchased or sold by the
Partnership and the unaffiliated third parties, including Third Party
Funds and Third Party Investors. Raymond James entities, including the
General Partner, also may be compensated for services to entities in
which the Partnerships invest and to entities that are competitors of
these entities, and may otherwise engage in normal business activities.
    12. The Partnerships may borrow from a General Partner or a Raymond
James entity. The interest rate on such loans will be no less favorable
to the Partnerships than the rate that could be obtained on an arm's
length basis. A Partnership 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 Partnership (other than short-
term paper). Any borrowing by a Partnership will be non-recourse to the
Limited Partners of the Partnership, except indebtedness incurred
specifically on behalf of a Limited Partner where such Limited Partner
has agreed to guarantee the loan or act as co-obligor on the loan.
    13. A Partnership will not invest more than 15% of its assets in
securities issued by registered investment companies (with the
exception of temporary investments in money market funds). A
Partnership will not acquire any security issued by a registered
investment company if immediately after the acquisition; the
Partnership will own more than 3% of the outstanding voting stock of
the registered investment company.

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) of the Act provides that, 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 applicants and any Subsequent Partnerships 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.
    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
Raymond James entity or a Third Party Fund, acting as principal, to
engage in any transaction directly or indirectly with any Partnership
or any company controlled by the Partnership; (b) any Partnership to
invest in or engage in any transaction with any Raymond James entity,
acting as principal, (i) in which the Partnership, any company
controlled by the Partnership, or any Raymond James entity or Third
Party Fund has invested or will invest, or (ii) with which the
Partnership, any company controlled by the Partnership, or any Raymond
James entity or Third Party Fund is or will become affiliated; and (c)
any Third Party Investor, acting as principal, to engage in any
transaction directly or indirectly with a Partnership or any company
controlled by the Partnership.
    4. Applicants state that an exemption from section 17(a) is
consistent with the protection of investors and is necessary to promote
the purpose of each Partnership. Applicants state that the Participants
in each Partnership will be fully informed of the possible extent of
the Partnership's dealings with Raymond James. Applicants also state
that, as professionals employed in investment banking and financial
planning, Participants in each Partnership will be able to understand
and evaluate the attendant risks. Applicants assert that the community
of interest among the Participants and Raymond James will provide the
best protection against any risk of abuse.
    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 with the company unless
authorized by the Commission. Applicants request relief to permit
affiliated persons of each Partnership, or affiliated persons of any of
these persons, to participate in any joint arrangement in which the
Partnership or a company controlled by the Partnership is a
participant.
    6. Applicants assert that compliance with section 17(d) would cause
the Partnerships to forgo investment opportunities simply because a
Participant or other affiliated person of the Partnerships (or any
affiliate of the affiliated person) made or is concurrently making a
similar investment. Applicants also state that because certain
attractive investment opportunities often require that each participant
make available funds in an amount substantially greater than that
available to one Partnership alone, there may be attractive
opportunities that a Partnership may be unable to take advantage of
except by co-investing with other persons, including affiliated
persons. 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 a Third Party Fund, or by a Raymond James
entity pursuant to a contractual obligation to a Third Party Fund, will
not be subject to condition 3 below. Applicants note that it is common
for a Third Party Fund to require that Raymond James invest its own
capital in Third Party Fund investments, and that Raymond James
investments 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 Partnerships, and that the Third Party Fund not be
burdened or otherwise affected by activities of the Partnerships. In
addition, applicants assert that the relationship of a Partnership to a
Third Party Fund is fundamentally different from a Partnership's
relationship to Raymond James. Applicants contend

that the focus of, and the rationale for, the protections contained in
the requested relief are to protect the Partnerships from any
overreaching by Raymond James in the employer/employee context, whereas
the same concerns are not present with respect to the Partnerships and
a Third Party Fund.
    8. Section 17(e) of the Act and rule 17e-1 under the Act limit the
compensation an affiliated person may receive when acting as agent or
broker for a registered investment company. Applicants request an
exemption from section 17(e) to permit a Raymond James entity
(including the General Partner) that acts as an agent or broker to
receive placement fees, advisory fees, or other compensation from a
Partnership in connection with the purchase or sale by the Partnership
of securities, provided that the fees or other compensation can be
deemed ``usual and customary.'' Applicants state that for the purposes
of the application, fees or other compensation will be deemed ``usual
and customary'' only if (a) the Partnership is purchasing or selling
securities alongside other unaffiliated third parties, including Third
Party Funds or Third Party Investors, who are similarly purchasing or
selling securities, (b) the fees or other compensation being charged to
the Partnership are also being charged to the unaffiliated third
parties, including Third Party Funds and Third Party Investors, and (c)
the amount of securities being purchased or sold by the Partnership
does not exceed 50% of the total amount of securities being purchased
or sold by the Partnership and the unaffiliated third parties,
including Third Party Funds or Third Party Investors. Applicants assert
that, because Raymond James does not wish it to appear as if it is
favoring the Partnerships, compliance with section 17(e) would prevent
a Partnership from participating in transactions where the Partnership
is being charged lower fees than unaffiliated third parties. Applicants
assert that the fees or other compensation paid by a Partnership to a
Raymond James entity will be the same as those negotiated at arm's
length with unaffiliated third parties.
    9. Rule 17e-1(b) under the Act requires that a majority of
directors who are not ``interested persons'' (as defined in section
2(a)(19) of the Act) take actions and make approvals regarding
commissions, fees, or other remuneration. Rule 17e-1(c) under the Act
requires each Partnership to comply with the fund governance standards
defined in rule 0-1(a)(7) under the Act. Applicants request an
exemption from rule 17e-1 to the extent necessary to permit each
Partnership to comply with the rule without having a majority of the
directors of the General Partner who are not interested persons take
actions and make determinations as set forth in paragraph (b) of the
rule, and without having to satisfy the standards set forth in
paragraph (c) of the rule. Applicants state that because all the
directors of the General Partner will be affiliated persons, without
the relief requested, a Partnership could not comply with rule 17e-1.
Applicants state that each Partnership will comply with rule 17e-1(b)
by having a majority of the directors of the Partnership take actions
and make approvals as are set forth in rule 17e-1. Applicants state
that each Partnership will comply with all other requirements of rule
17e-1.
    10. Section 17(f) of the Act designates the entities that may act
as investment company custodians, and rule 17f-1 under the Act imposes
certain requirements when the custodian is a member of a national
securities exchange. Applicants request an exemption from section 17(f)
and rule 17f-1 to permit a Raymond James entity to act as custodian of
Partnership assets without a written contract, as would be required by
rule 17f-1(a). Applicants also request an exemption from the rule 17f-
1(b)(4) requirement that an independent accountant periodically verify
the assets held by the custodian. Applicants state that, because of the
community of interest between Raymond James and the Partnerships and
the existing requirement for an independent audit, compliance with
these requirements would be unnecessarily burdensome and expensive.
Applicants will comply with all other requirements of rule 17f-1.
    11. 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. Rule
17g-1 requires that a majority of directors who are not interested
persons take certain actions and give certain approvals relating to
fidelity bonding. Applicants request exemptive relief to permit the
General Partner's directors, who may be deemed interested persons, to
take actions and make determinations set forth in the rule. Applicants
state that, because all directors of the General Partner will be
affiliated persons, a Partnership could not comply with rule 17g-1
without the requested relief. Specifically, each Partnership will
comply with rule 17g-1 by having a majority of the Partnership's
directors take actions and make determinations as are set forth in rule
17g-1. Applicants also state that each Partnership will comply with all
other requirements of rule 17g-1, except that the Partnerships request
an exemption from the requirements of paragraphs (g) and (h) or rule
17g-1 relating to the filing of copies of fidelity bonds and related
information with the Commission and relating to this provision of
notices to the board of directors, and an exemption from the
requirements of paragraph (j)(3) of rule 17g-1 that the Partnerships
comply with the fund governance standards defined in rule 0-1(a)(7).
    12. 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
Partnerships.
    13. 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 a
Partnership and would entail administrative and legal costs that
outweigh any benefit to the Participants. Applicants request exemptive
relief to the extent necessary to permit each Partnership to report
annually to its Participants. Applicants also request an exemption from
section 30(h) of the Act to the extent necessary to exempt the General
Partner of each Partnership, directors and officers of the General
Partnership and any other persons who may be deemed to be members of an
advisory board of a Partnership from filing Forms 3, 4, and 5 under
section 16(a) of the 1934 Act with respect to their ownership of
Interests in the Partnership. 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.
    14. Rule 38a-1 requires investment companies to adopt, implement
and

periodically review written policies reasonable designed to prevent
violation of the federal securities law and to appoint a chief
compliance officer. Each Partnership will comply will rule 38a-1(a),
(c) and (d), except that (a) because the Partnership does not have a
board of directors, the board of directors of the General Partner will
fulfill the responsibilities assigned to the Partnership's board of
directors under the rule, (b) because the board of directors of the
General Partner does not have any disinterested members, approval by a
majority of the disinterested board members required by rule 38a-1 will
not be obtained, and (c) because the board of directors of the General
Partner does not have any independent members, the Partnerships will
comply with the requirement in rule 38a-1(a)(4)(iv) that the chief
compliance officer meet with the independent board members by having
the chief compliance officer meet with the board of directors of the
General Partner as constituted.

Applicants' Conditions

    Applicants agree that any order granting the requested relief will
be subject to the following conditions:
    1. Each proposed transaction otherwise prohibited by section 17(a)
or section 17(d) and rule 17d to which a Partnership is a party (the
``Section 17 Transactions'') will be effected only if the General
Partner determines that:
    (a) The terms of the Section 17 Transaction, including the
consideration to be paid or received, are fair and reasonable to the
Partners of the participating Partnership and do not involve
overreaching of such Partnership or its Partners on the part of any
person concerned; and
    (b) The Section 17 Transaction is consistent with the interests of
the Partners of the participating Partnership, such Partnership's
organizational documents and such Partnership's reports to its
Partners.
    In addition, the General Partner will record and will preserve a
description of all Section 17 Transactions, the General Partner's
findings and the information or materials upon which the General
Partner's findings are based and the basis for the findings. All such
records will be maintained for the life of the Partnership and at least
six years thereafter, and will be subject to examination by the
Commission and its staff. Each Partnership will preserve the accounts,
books and other documents required to be maintained in an easily
accessible place for the first two years.
    2. In connection with the Section 17 Transactions, the General
Partner will adopt, and periodically review and update, procedures
designed to ensure that reasonable inquiry is made, prior to 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 Partnership, or any
affiliated person of such a person, promoter or principal underwriter.
    3. The General Partner will not make on behalf of a Partnership any
investment in which a `` Co-Investor'' with respect to any Partnership
(as defined below) has acquired or proposes to acquire the same class
of securities of the same issuer, where the investment involves a joint
enterprise or other joint arrangement within the meaning of rule 17d-1
in which such Partnership and the Co-Investor are participants, unless
any such Co-Investor, prior to disposing of all or part of its
investment, (a) gives such General Partner 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 participating
Partnership holding such investment has the opportunity to dispose of
its investment prior to or concurrently with, on the same terms as, and
on a pro rata basis with the Co-Investor. The term ``Co-Investor'' with
respect to any Partnership means any person who is: (a) An ``affiliated
person'' (as defined in section 2(a)(3) of the Act) of such Partnership
(other than a Third Party Fund); (b) a Raymond James entity; (c) an
officer or director of a Raymond James entity; or (d) an entity (other
than a Third Party Fund) in which the General Partner 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, shall not be
deemed to limit or prevent the disposition of an investment by a Co-
Investor: (a) To its direct or indirect wholly-owned subsidiary, to any
company (a ``Parent'') of which such 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 such
Co-Investor, including step and adoptive relationships, or to a trust
or other investment vehicle established for any such immediate family
member; (c) when the investment is comprised of securities that are
listed on any exchange registered as a national securities exchange
under section 6 of the 1934 Act; (d) when the investment is comprised
of securities that are national market system securities pursuant to
section 11A(a)(2) of the 1934 Act and rule 11Aa2-1 thereunder; (e) when
the investment is comprised of securities that are listed 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; or (f) when the investment is comprised of
securities that are government securities as defined in section
2(a)(16) of the Act.
    4. Each Partnership and its General Partner will maintain and
preserve, for the life of such Partnership and at least six years
thereafter, such accounts, books, and other documents as constitute the
record forming the basis for the audited financial statements that are
to be provided to the Participants in such Partnership, and each annual
report of such Partnership required to be sent to such Participants,
and agree that all such records will be subject to examination by the
Commission and its staff. Each Partnership will preserve the accounts,
books and other documents required to be maintained in an easily
accessible place for the first two years.
    5. The General Partner of each Partnership will send to each
Participant in that Partnership, at any time during the fiscal year
then ended, Partnership financial statements audited by such
Partnership's independent accountants, except in the case of a
Partnership formed to make a single Portfolio Investment. In such
cases, financial statements will be unaudited, but each Participant
will receive financial statements of the single Portfolio Investment
audited by such entity's independent accountants. At the end of each
fiscal year, the General Partner will make a valuation or have a
valuation made of all of the assets of the Partnership 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 Partnership.
In addition, within 120 days after the end of each fiscal year of each
Partnership or as soon as practicable thereafter, the General Partner
will send a report to each person who was a Participant at any time
during the fiscal year then ended, setting forth such tax information
as shall be necessary for the preparation by the Participant of his,
her or its U.S. federal and state income tax returns and a report of
the investment activities of the Partnership during that fiscal year.
    6. If a Partnership makes purchases or sales from or to an entity
affiliated with the Partnership by reason of an officer,

director or employee of Raymond James (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, such individual will not
participate in the Partnership's determination 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. E7-20444 Filed 10-16-07; 8:45 am]

BILLING CODE 8011-01-P


[Federal Register Volume 82, Number 72 (Monday, April 17, 2017)]
[Notices]
[Pages 18208-18210]
[FR Doc No: 2017-07614]

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DEPARTMENT OF TRANSPORTATION

National Highway Traffic Safety Administration

[Docket No. NHTSA-2017-0013; Notice 1]

Hyundai Motor America, Receipt of Petition for Decision of
Inconsequential Noncompliance

AGENCY: National Highway Traffic Safety Administration (NHTSA),
Department of Transportation (DOT).

ACTION: Receipt of petition.

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SUMMARY: Hyundai Motor America (Hyundai), on behalf of Hyundai Motor
Company, has determined that certain model year (MY) 2015 Hyundai
Sonata motor vehicles do not fully comply with Federal Motor Vehicle
Safety Standard (FMVSS) No. 108, Lamps, Reflective Devices, and
Associated Equipment. Hyundai filed a noncompliance information report
dated February 5, 2017. Hyundai also petitioned NHTSA on February 3,
2017, for a decision that the subject noncompliance is inconsequential
as it relates to motor vehicle safety.

DATES: The closing date for comments on the petition is May 17, 2017.

ADDRESSES: Interested persons are invited to submit written data,
views, and arguments on this petition. Comments must refer to the
docket and notice number cited in the title of this notice and
submitted by any of the following methods:
     Mail: Send comments by mail addressed to U.S. Department
of Transportation, Docket Operations, M-30, West Building Ground Floor,
Room W12-140, 1200 New Jersey Avenue SE., Washington, DC 20590.
     Hand Delivery: Deliver comments by hand to U.S. Department
of Transportation, Docket Operations, M-30, West Building Ground Floor,
Room W12-140, 1200 New Jersey Avenue SE., Washington, DC 20590. The
Docket Section is open on weekdays from 10 a.m. to 5 p.m. except
Federal Holidays.
     Electronically: Submit comments electronically by logging
onto the Federal Docket Management System (FDMS) Web site at https://www.regulations.gov/. Follow the online instructions for submitting
comments.
     Comments may also be faxed to<PHONE_NUMBER>.

    Comments must be written in the English language, and be no greater
than 15 pages in length, although there is no limit to the length of
necessary attachments to the comments. If comments are submitted in
hard copy form, please ensure that two copies are provided. If you wish
to receive confirmation that comments you have submitted by mail were
received, please enclose a stamped, self-addressed postcard with the
comments. Note that all comments received will be posted without change
to https://www.regulations.gov, including any personal information
provided.
    All comments and supporting materials received before the close of
business on the closing date indicated above will be filed in the
docket and will be considered. All comments and supporting materials
received after the closing date will also be filed and will be
considered to the fullest extent possible.
    When the petition is granted or denied, notice of the decision will
also be published in the Federal Register pursuant to the authority
indicated at the end of this notice.
    All comments, background documentation, and supporting materials
submitted to the docket may be viewed by anyone at the address and
times given above. The documents may also be viewed on the Internet at
https://www.regulations.gov by following the online instructions for
accessing the dockets. The docket ID number for this petition is shown
in the heading of this notice.
    DOT's complete Privacy Act Statement is available for review in a
Federal Register notice published on April 11, 2000, (65 FR 19477-78).

SUPPLEMENTARY INFORMATION:
    I. Overview: Hyundai Motor America (Hyundai), has determined that
certain model year (MY) 2015 Hyundai Sonata motor vehicles do not fully
comply with paragraph S<IP_ADDRESS>.1 of Federal Motor Vehicle Safety
Standard (FMVSS) No. 108, Lamps, Reflective Devices, and Associated
Equipment. Hyundai filed a noncompliance information report dated
February 5, 2017, Defect and Noncompliance Responsibility and Reports.
Hyundai also petitioned NHTSA on February 3, 2017, pursuant to 49
U.S.C. 30118(d) and 30120(h) and 49 CFR part 556, for an exemption from
the notification and remedy requirements of 49 U.S.C. Chapter 301 on
the basis that this noncompliance is inconsequential as it relates to
motor vehicle safety.
    This notice of receipt of Hyundai's petition is published under 49
U.S.C. 30118 and 30120 and does not represent any agency decision or
other exercise of judgment concerning the merits of the petition.
    II. Vehicles Involved: Approximately 3,054 MY 2015 Hyundai Sonata
motor vehicles, manufactured between April 25, 2014, and May 16, 2014,
are potentially involved.
    III. Noncompliance: Hyundai explains that the noncompliance is that
the lens on the replaceable headlamp assembly in the subject vehicles
is missing the HB bulb designation, as required by paragraph S<IP_ADDRESS>.1
of FMVSS No. 108.
    IV. Rule Text: Paragraph S<IP_ADDRESS>.1 of FMVSS No. 108 states in
pertinent part:

    S<IP_ADDRESS> Replacable bulb headlamp markings.
    S<IP_ADDRESS>.1 The lens of each replaceable bulb headlamp must bear
permanent marking in front of each replacable light source with
which it is equipped that states either: The HB Type, if the light
source conforms to S11 of this standard for filament light sources,
or the bulb marking/designation provided in compliance with Section
VIII of appendix A of 49 CFR part 564 (if the light source conforms
to S11 of this standard for discharge light sources) . . .

    V. Summary of Hyundai's Petition: Hyundai described the subject
noncompliance and stated its belief that the noncompliance is
inconsequential as it relates to motor vehicle safety.
    In support of its petition, Hyundai submitted the following
reasoning:
    (a) The noncompliance has no impact on headlamp performance: The
mismarked headlamps are the correct headlamps for the affected vehicles
and conform to all applicable FMVSS photometric and other requirements.
In a recent decision involving similar facts, NHTSA granted an
inconsequentiality petition involving a noncompliant bulb marking
because the use of the mismarked bulb would ``not create a
noncompliance with any of the headlamp performance requirements of
FMVSS No. 108 or otherwise present an increased risk to motor vehicle
safety.'' Osram Sylvania Products, Inc., grant of petition for decision
of Inconsequential Noncompliance, 78 FR 22943, 22944 (Dep't of Trans.
Apr. 17, 2013)
    (b) The lens is marked with an industry standard bulb type: The
headlamp lenses in question are clearly marked ``9005'' (the ANSI
designation), which are well-known alternative designations for the HB3
bulb. This designation is recognized throughout the automotive
industry, and is used by lighting manufacturers interchangeably with a
lamp's HB type.
    (c) The risk of consumer confusion is remote: A consumer can use
the 9005 ANSI alternative to properly identify and purchase the correct
replacement headlamp bulb for the affected vehicles. Hyundai searched a
number of national automotive parts stores (Autozone, O'Reilly,
Advanced Auto Parts, and Pep Boys), and found that all HB3 replacement
bulbs in these stores were marked with the 9005 ANSI designation. In
fact, the packaging on the replacement bulbs was more commonly marked
with the ANSI designation than the HB type.
    (d) NHTSA precedent supports granting this petition: NHTSA has
previously ruled that the noncompliance at issue here (lamps marked
with the ANSI designation rather than the HB type) is inconsequential
to motor vehicle safety. On January 18, 2017, the Agency granted GM's
petition for inconsequential noncompliance regarding their high-beam
headlamp lenses on model year 2012-2015 Chevrolet Sonic passenger cars
that were not marked with ``HB3'' (the HB bulb type), as required by
paragraph S<IP_ADDRESS>.1 of FMVSS No. 108. NHTSA granted the petition
stating:

    We agree with GM that the ANSI `9005' designation is a well-
known alternative designation for the HB3 light source and that the
replacement light source packaging is commonly marked with both the
HB type and ANSI designation. As such, we believe that consumers can
properly identify and purchase the correct replacement upper beam
light source for the affected vehicles.

    See General Motors, LLC, Grant of petition for Decision of
Inconsequential Noncompliance, (NHTSA-2015-0035).
    Hyundai concluded by expressing the belief that the subject
noncompliance is inconsequential as it relates to motor vehicle safety,
and that its petition to be exempted from providing notification of the
noncompliance, as required by 49 U.S.C. 30118, and a remedy for the
noncompliance, as required by 49 U.S.C. 30120, should be granted.
    NHTSA notes that the statutory provisions (49 U.S.C. 30118(d) and
30120(h)) that permit manufacturers to file petitions for a
determination of inconsequentiality allow NHTSA to exempt manufacturers
only from the duties found in sections 30118 and 30120, respectively,
to notify owners, purchasers, and dealers of a defect or noncompliance
and to remedy the defect or noncompliance. Therefore, any decision on
this petition only applies to the subject vehicles that Hyundai no
longer controlled at the time it determined that the noncompliance
existed. However, any decision on this petition does not relieve
vehicle distributors and dealers of the prohibitions on the sale, offer
for sale,

or introduction or delivery for introduction into interstate commerce
of the noncompliant vehicles under their control after Hyundai notified
them that the subject noncompliance existed.

    Authority:  49 U.S.C. 30118, 30120: delegations of authority at
49 CFR 1.95 and 501.8.

Jeffrey M. Giuseppe,
Director, Office of Vehicle Safety Compliance.
[FR Doc. 2017-07614 Filed 4-14-17; 8:45 am]
 BILLING CODE 4910-59-P