[Federal Register Volume 79, Number 57 (Tuesday, March 25, 2014)]
[Notices]
[Pages 16384-16388]
[FR Doc No: 2014-06465]

=======================================================================
-----------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION

[Release No. IC-30985; File No. 812-14134]

PennantPark Investment Corp., et al.; Notice of Application

March 19, 2014.
AGENCY: Securities and Exchange Commission (``Commission'').

ACTION: Notice of application for an order under sections 17(d) and
57(i) of the Investment Company Act of 1940 (the ``Act'') and rule 17d-
1 under the Act to permit certain joint transactions otherwise
prohibited by sections 17(d) and 57(a)(4) of the Act and rule 17d-1
under the Act.

-----------------------------------------------------------------------

Summary of Application: Applicants request an order to permit business
development companies (each, a ``BDC'') and certain closed-end
management investment companies to co-invest in portfolio companies
with each other and with affiliated investment funds.

Applicants: PennantPark Investment Corporation (``PNNT''), PennantPark
Floating Rate Capital Ltd. (``PFLT''), PennantPark Floating Rate
Capital Funding I, LLC (``Funding I''), PennantPark SBIC LP (``SBIC
I''), PennantPark SBIC II LP (``SBIC II''), PennantPark Credit
Opportunities Fund, LP (``PCOF'') and PennantPark Investment Advisers,
LLC (the ``Adviser'').

Filing Dates: The application was filed on March 15, 2013, and amended
on August 7, 2013, December 5, 2013 and March 5, 2014. Applicants have
agreed to file an amendment during the notice period, the substance of
which is reflected in this notice.

Hearing or Notification of Hearing: An order granting the requested
relief 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 April 14, 2014, 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
St. NE., Washington, DC 20549-1090. Applicants: 590 Madison Avenue,
15th Floor, New York, NY 10022.

FOR FURTHER INFORMATION CONTACT: Laura L. Solomon, Senior Counsel, at
(202) 551-6915 or Daniele Marchesani, Branch Chief, at<PHONE_NUMBER>
(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<PHONE_NUMBER>.

Applicants' Representations

    1. PNNT and PFLT are Maryland corporations organized as closed-end
management investment companies that have elected to be regulated as
BDCs under the Act (together, the ``PennantPark BDCs'').\1\ PNNT's
Objectives and Strategies \2\ are to generate both current income and
capital appreciation through debt and equity investments. PNNT invests
primarily in U.S. middle-market companies in the form of senior secured
loans, mezzanine debt and equity investments. PFLT's Objectives and
Strategies are to generate current income and capital appreciation by
investing primarily in floating rate loans and other investments made
to U.S. private middle-market companies. A majority of the directors of
each of PNNT and PFLT are not ``interested persons'' as defined in
section 2(a)(19) of the Act of PNNT and PFLT, respectively
(``Independent Directors'').
---------------------------------------------------------------------------

    \1\ 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.
    \2\ ``Objectives and Strategies'' means a Regulated Fund's
(defined below) investment objectives and strategies as described in
the Regulated Fund's registration statement on Form N-2, other
filings the Regulated Fund has made with the Commission under the
Securities Act of 1933 (``Securities Act''), or under the Securities
Exchange Act of 1934, and the Regulated Fund's reports to
stockholders.
---------------------------------------------------------------------------

    2. PCOF is a limited partnership organized under Delaware law and
is excluded from the definition of investment company under section
3(c)(7) of the Act. PCOF's investment objectives are capital
preservation, income generation and capital

appreciation primarily through debt and/or equity investments generally
in midsize companies in North America and Western Europe.
    3. Funding I is a wholly-owned subsidiary of PFLT formed to enter
into a credit facility. SBIC I and SBIC II, wholly-owned subsidiaries
of PNNT, are Delaware limited partnerships operating as small business
investment companies whose investment objectives are to generate both
current income and capital appreciation through debt and equity
investments. Each of Funding I, SBIC I and SBIC II is a Wholly-Owned
Investment Subsidiary (as defined below).
    4. PennantPark Investment Advisers, LLC, a Delaware limited
liability company, is and any other Adviser will be registered as an
investment adviser under the Investment Advisers Act of 1940 (the
``Advisers Act''). PennantPark Investment Advisers, LLC serves as the
investment adviser to PNNT, PFLT, PCOF and Funding I. PNNT advises SBIC
I and SBIC II.\3\
---------------------------------------------------------------------------

    \3\ Advisory personnel of the Adviser will act on behalf of PNNT
in providing management services to SBIC I and SBIC II.
---------------------------------------------------------------------------

    5. Applicants seek an order (``Order'') to permit one or more
Regulated Funds \4\ and one or more Private Funds \5\ to participate in
the same investment opportunities through a proposed co-investment
program where such participation would otherwise be prohibited under
sections 17(d) and 57(a)(4) and rule 17d-1 (the ``Co-Investment
Program'') by (a) co-investing with each other in certain securities of
issuers (a ``portfolio company'') and (b) making additional investments
in securities of issuers, including through the exercise of warrants,
conversion privileges, and other rights to purchase securities of the
issuers (``Follow-On Investments''). ``Co-Investment Transaction''
means any transaction in which a Regulated Fund (or a Wholly-Owned
Investment Subsidiary (as defined below)) participated together with a
Co-Investment Affiliate in reliance on the Order. ``Potential Co-
Investment Transaction'' means any investment opportunity in which a
Regulated Fund (or a Wholly-Owned Investment Subsidiary) could not
participate together with one or more Co-Investment Affiliates without
obtaining and relying on the Order.\6\
---------------------------------------------------------------------------

    \4\ ``Regulated Fund'' means the PennantPark BDCs and any
management investment company (a) that is registered under the Act
as a closed-end fund or has elected to be regulated as a BDC; (b)
whose investment adviser is PennantPark Investment Advisers, LLC or
any other adviser that is controlling, controlled by or under common
control with PennantPark Investment Advisers, LLC (included in the
term ``Adviser''); and (c) that intends to participate in the Co-
Investment Program (as defined below).
    \5\ ``Private Fund'' means PCOF and any other entity (a) whose
investment adviser is an Adviser; (b) that would be an investment
company but for section 3(c)(1) or 3(c)(7) of the Act; and (c) that
intends to participate in the Co-Investment Program. The Private
Funds, together with the Regulated Funds are referred to as the
``Co-Investment Affiliates.''
    \6\ All existing entities that currently intend to rely on the
Order have been named as applicants. Any other existing or future
entity that relies on the Order in the future will comply with the
terms and conditions of the application.
---------------------------------------------------------------------------

    6. Applicants state that a Regulated Fund may, from time to time,
form a special purpose subsidiary (a ``Wholly-Owned Investment
Subsidiary'').\7\ A Co-Investment Affiliate would be prohibited from
investing in a Co-Investment Transaction with any Wholly-Owned
Investment Subsidiary because the Wholly-Owned Investment Subsidiary
would be a company controlled by a Regulated Fund for purposes of
sections 17(d) and 57(a)(4) and rule 17d-1. Applicants request that a
Wholly-Owned Investment Subsidiary be permitted to participate in Co-
Investment Transactions in lieu of the parent Regulated Fund and that
the Wholly-Owned Investment Subsidiary's participation in any such
transaction be treated, for purposes of the Order, as though the
applicable Regulated Fund were participating directly. Applicants
represent that this treatment is justified because a Wholly-Owned
Investment Subsidiary would have no purpose other than serving as a
holding vehicle for a Regulated Fund's investments and, therefore, no
conflicts of interest could arise between such Regulated Fund and the
Wholly-Owned Investment Subsidiary. The board of directors of the
applicable Regulated Fund would make all relevant determinations under
the conditions with regard to a Wholly-Owned Investment Subsidiary's
participation in a Co-Investment Transaction, and the board of
directors would be informed of, and take into consideration, any
proposed use of a Wholly-Owned Investment Subsidiary in the applicable
Regulated Fund's place. If a Regulated Fund proposes to participate in
the same Co-Investment Transaction with any of its Wholly-Owned
Investment Subsidiaries, the board of directors will also be informed
of, and take into consideration, the relative participation of the
Regulated Fund and the Wholly-Owned Investment Subsidiary.
---------------------------------------------------------------------------

    \7\ The term ``Wholly-Owned Investment Subsidiary'' means an
entity (a) whose sole business purposes are to hold one or more
investments and issue debt on behalf of a Regulated Fund (and, in
the case of an SBIC Subsidiary (as defined below), maintain a
license under the SBA Act (as defined below) and issue debentures
guaranteed by the SBA (as defined below); (b) that is wholly-owned
by such Regulated Fund (with such Regulated Fund at all times
directly or indirectly holding, beneficially and of record, 100% of
the voting and economic interests); (c) with respect to which the
board of directors of the Regulated Fund has the sole authority to
make all determinations with respect to the Wholly-Owned Investment
Subsidiary's participation under the conditions of the application;
and (d) that is an entity that would be an investment company but
for section 3(c)(1) or 3(c)(7) of the Act. The term ``SBIC
Subsidiary'' means a Wholly-Owned Investment Subsidiary that is
licensed by the Small Business Administration (the ``SBA'') to
operate under the Small Business Investment Act of 1958, as amended,
(the ``SBA Act'') as a small business investment company (an
``SBIC'').
---------------------------------------------------------------------------

    7. Applicants represent that the Advisers will refer all Potential
Co-Investment Transactions that an investment adviser considers for a
Co-Investment Affiliate, and that are within a Regulated Fund's
Objectives and Strategies, to that Regulated Fund's Adviser. For each
such referral, when selecting investments for a Co-Investment
Affiliate, the applicable Adviser will consider only the investment
objective, investment policies, investment position, Available Capital
(as defined below), and other pertinent factors applicable to the
respective Co-Investment Affiliate. The Adviser expects that a
portfolio company that is an appropriate investment for one Co-
Investment Affiliate may be an appropriate investment for another Co-
Investment Affiliate, with certain exceptions based on available
capital (``Available Capital'') \8\ or diversification.
---------------------------------------------------------------------------

    \8\ ``Available Capital'' consists solely of liquid assets not
held for permanent investment, including cash, amounts that can
currently be drawn down from lines of credit, and marketable
securities held for short-term purposes. In addition, Available
Capital would include bona fide uncalled capital commitments that
can be called by the settlement date of the Co-Investment
Transaction.
---------------------------------------------------------------------------

    8. Other than pro rata dispositions and Follow-On Investments as
provided in conditions 7 and 8, and after making the determinations
required in conditions 1 and 2(a), the Adviser will present each
Potential Co-Investment Transaction and the proposed allocation to the
directors of the board eligible to vote under section 57(o) of the Act
(``Eligible Directors''), and the ``required majority,'' as defined in
section 57(o) of the Act (``Required Majority'') \9\ of a Regulated
Fund will approve each Co-Investment Transaction prior to any
investment by a Regulated Fund.
---------------------------------------------------------------------------

    \9\ With respect to Regulated Funds that are not BDCs, the
defined terms Eligible Directors and Required Majority apply as if
each Regulated Fund were a BDC subject to section 57(o) of the Act.
---------------------------------------------------------------------------

    9. With respect to the pro rata dispositions and Follow-On
Investments provided in conditions 7 and 8, a

Regulated Fund may participate in a pro rata disposition or Follow-On
Investment without obtaining prior approval of the Required Majority
if, among other things: (i) the proposed participation of each Co-
Investment Affiliate in such disposition or Follow-On Investment is
proportionate to its outstanding investments in the issuer immediately
preceding the disposition or Follow-On Investment, as the case may be;
and (ii) the board of directors of the Regulated Fund has approved that
Regulated Fund's participation in pro rata dispositions and Follow-On
Investments as being in the best interests of the Regulated Fund. If
the board does not so approve, any such disposition or Follow-On
Investment will be submitted to the Regulated Fund's Eligible
Directors. The board of any Regulated Fund may at any time rescind,
suspend or qualify its approval of pro rata dispositions and Follow-On
Investments with the result that all dispositions and/or Follow-On
Investments must be submitted to the Eligible Directors.
    10. No Independent Director of a Regulated Fund will have a direct
or indirect financial interest in any Co-Investment Transaction or any
interest in a portfolio company other than through an interest (if any)
in the securities of a Regulated Fund and none will participate
individually in any Co-Investment Transaction.

Applicants' Legal Analysis

    1. Section 17(d) of the Act and rule 17d-1 under the Act prohibit
affiliated persons of a registered investment company from
participating in joint transactions with the company or a company
controlled by such registered investment company unless the Commission
has granted an order permitting such transactions. Section 57(a)(4) of
the Act prohibits certain affiliated persons of a BDC from
participating in joint transactions with the BDC (or a company
controlled by such BDC) in contravention of rules as prescribed by the
Commission. Section 57(i) of the Act provides that, until the
Commission prescribes rules under section 57(a)(4), the Commission's
rules under section 17(d) of the Act applicable to registered closed-
end investment companies will be deemed to apply to BDCs. Because the
Commission has not adopted any rules under section 57(a)(4), rule 17d-1
applies.
    2. Applicants submit that the Adviser and the Co-Investment
Affiliates would be deemed to be persons related to a Regulated Fund in
a manner described by sections 17(d) or 57(b) and therefore prohibited
by sections 17(d) or 57(a)(4) and rule 17d-1 from participating in the
Co-Investment Transactions without the Order.
    3. Rule 17d-1 under the Act generally prohibits participation by a
registered investment company, or a company controlled by such
registered investment company, and an affiliated person (as defined in
section 2(a)(3) of the Act) or principal underwriter for that
investment company, or an affiliated person of such affiliated person
or principal underwriter, in any joint enterprise or other joint
arrangement or profit sharing plan, as defined in the rule, absent an
order by the Commission. Similarly, rule 17d-1, as made applicable to
BDCs by section 57(i), prohibits any person who is related to a BDC in
a manner described in section 57(b), acting as principal, from
participating in, or effecting any transaction in connection with, any
joint enterprise or other joint arrangement or profit-sharing plan in
which the BDC (or a company controlled by such BDC) is a participant,
absent an order from the Commission. In passing upon applications under
rule 17d-1, the Commission considers whether the company's
participation in the joint transaction is consistent with the
provisions, policies, and purposes of the Act and the extent to which
such participation is on a basis different from or less advantageous
than that of other participants.
    4. Applicants state that co-investment in portfolio companies by
the Co-Investment Affiliates will increase favorable investment
opportunities for the PennantPark BDCs and any other Regulated Fund.
Applicants submit that the Required Majority's approval of each Co-
Investment Transaction before investment, and other protective
conditions set forth in the application, will ensure that the Regulated
Funds will be treated fairly. Applicants state that the Regulated
Funds' participation in the Co-Investment Transactions will be
consistent with the provisions, policies and purposes of the Act and on
a basis that is not different from or less advantageous than that of
other Co-Investment Affiliates.

Applicants' Conditions

    Applicants agree that any Order granting the requested relief will
be subject to the following conditions:
    1. Each time an investment adviser of a Co-Investment Affiliate
considers a Potential Co-Investment Transaction for any Co-Investment
Affiliate that falls within a Regulated Fund's Objectives and
Strategies, the Regulated Fund's Adviser will make an independent
determination of the appropriateness of the investment for the
Regulated Fund in light of the Regulated Fund's then-current
circumstances.
    2. (a) If the Adviser deems a Regulated Fund's participation in any
Potential Co-Investment Transaction to be appropriate for the Regulated
Fund, it will then determine an appropriate level of investment for the
Regulated Fund;
    (b) If the aggregate amount recommended by the Adviser to be
invested by the Regulated Fund in the Potential Co-Investment
Transaction, together with the amount proposed to be invested by each
other Co-Investment Affiliate, collectively in the same transaction,
exceeds the amount of the investment opportunity, the investment
opportunity will be allocated among them pro rata based on each
participating party's Available Capital in the asset class being
allocated, up to the amount proposed to be invested by each. The
Adviser will provide the respective Eligible Directors with information
concerning each party's Available Capital to assist the Eligible
Directors with their review of such Regulated Fund's investments for
compliance with these allocation procedures; and
    (c) After making the determinations required in conditions 1 and
2(a), the Adviser will distribute written information concerning the
Potential Co-Investment Transaction, (including the amount proposed to
be invested by each Co-Investment Affiliate), to the Eligible Directors
for their consideration. The Regulated Fund will co-invest with one or
more Co-Investment Affiliates only if, prior to participating in the
Potential Co-Investment Transaction, a Required Majority concludes
that:
    (i) the terms of the transaction, including the consideration to be
paid, are reasonable and fair to the Regulated Fund and its
stockholders and do not involve overreaching in respect of the
Regulated Fund or its stockholders on the part of any person concerned;
    (ii) the transaction is consistent with:
    (A) the interests of the stockholders of the Regulated Fund; and
    (B) the Regulated Fund's then-current Objectives and Strategies;
    (iii) the investment by the Co-Investment Affiliates would not
disadvantage the Regulated Fund, and participation by the Regulated
Fund would not be on a basis different from or less advantageous than
that of the Co-Investment Affiliates; provided, that, if any Co-
Investment Affiliate, but not the Regulated Fund itself, gains the
right to nominate a director for election to a portfolio company's
board of directors

or the right to have a board observer or any similar right to
participate in the governance or management of the portfolio company,
such event shall not be interpreted to prohibit the Required Majority
from reaching the conclusions required by this condition (2)(c)(iii),
if:
    (A) the Eligible Directors will have the right to ratify the
selection of such director or board observer, if any;
    (B) the Adviser agrees to, and does, provide periodic reports to
the Regulated Fund's board of directors with respect to the actions of
the director or the information received by the board observer or
obtained through the exercise of any similar right to participate in
the governance or management of the portfolio company; and
    (C) any fees or other compensation that any Co-Investment Affiliate
or any affiliated person of any Co-Investment Affiliate receives in
connection with the right of the Co-Investment Affiliate to nominate a
director or appoint a board observer or otherwise to participate in the
governance or management of the portfolio company will be shared
proportionately among the participating Co-Investment Affiliates (the
Private Funds may, in turn, share their portion with their affiliated
persons) and the Regulated Fund in accordance with the amount of each
party's investment; and
    (iv) the proposed investment by the Regulated Fund will not benefit
the Adviser or the Co-Investment Affiliates or any affiliated person of
any of them (other than the parties to the Co-Investment Transaction),
except (A) to the extent permitted by condition 13, (B) to the extent
permitted by section 17(e) or 57(k) of the Act, as applicable; (C)
indirectly, as a result of an interest in securities issued by one of
the parties to the Co-Investment Transaction, or (D) in the case of
fees or other compensation described in condition 2(c)(iii)(C).
    3. Each Regulated Fund has the right to decline to participate in
any Potential Co-Investment Transaction or to invest less than the
amount proposed.
    4. The Adviser will present to the board of directors of each
Regulated Fund, on a quarterly basis, a record of all investments in
Potential Co-Investment Transactions made by the Co-Investment
Affiliates during the preceding quarter that fell within the Regulated
Fund's then-current Objectives and Strategies that were not made
available to the Regulated Fund, and an explanation of why such
investment opportunities were not offered to the Regulated Fund. All
information presented to the board of directors pursuant to this
condition will be kept for the life of the Regulated Fund and at least
two years thereafter and will be subject to examination by the
Commission and its staff.
    5. Except for Follow-On Investments made in accordance with
condition 8, the Regulated Fund will not invest in reliance on the
Order in any issuer in which any Co-Investment Affiliate or any
affiliated person of the Co-Investment Affiliates is an existing
investor.
    6. The Regulated Fund will not participate in any Potential Co-
Investment Transaction unless the terms, conditions, price, class of
securities to be purchased, settlement date, and registration rights
will be the same for the Regulated Fund as for each participating Co-
Investment Affiliate. The grant to a Co-Investment Affiliate, but not
the Regulated Fund, of the right to nominate a director for election to
a portfolio company's board of directors, the right to have an observer
on the board of directors or similar rights to participate in the
governance or management of the portfolio company will not be
interpreted so as to violate this condition 6, if conditions
2(c)(iii)(A), (B) and (C) are met.
    7. (a) If any Co-Investment Affiliate elects to sell, exchange or
otherwise dispose of an interest in a security that was acquired in a
Co-Investment Transaction, the Adviser will:
    (i) notify each Regulated Fund that participated in the Co-
Investment Transaction of the proposed disposition at the earliest
practical time; and
    (ii) formulate a recommendation as to participation by each
Regulated Fund in the disposition.
    (b) Each Regulated Fund will have the right to participate in such
disposition on a proportionate basis, at the same price and on the same
terms and conditions as those applicable to the participating Co-
Investment Affiliates.
    (c) A Regulated Fund may participate in such disposition without
obtaining prior approval of the Required Majority if: (i) The proposed
participation of each Co-Investment Affiliate in such disposition is
proportionate to its outstanding investment in the issuer immediately
preceding the disposition; (ii) the board of directors of the Regulated
Fund has approved as being in the best interests of the Regulated Fund
the ability to participate in such dispositions on a pro rata basis (as
described in greater detail in the application); and (iii) the board of
directors of the Regulated Fund is provided on a quarterly basis with a
list of all dispositions made in accordance with this condition. In all
other cases, the Adviser will provide its written recommendation as to
the Regulated Fund's participation to the Eligible Directors, and the
Regulated Fund will participate in such disposition solely to the
extent that a Required Majority determines that it is in the Regulated
Fund's best interests.
    (d) Each participating Co-Investment Affiliate will bear its own
expenses in connection with any such disposition.
    8. (a) If any Co-Investment Affiliate desires to make a Follow-On
Investment in a portfolio company whose securities were acquired in a
Co-Investment Transaction, the Adviser will:
    (i) notify each Regulated Fund that participated in the Co-
Investment Transaction of the proposed transaction at the earliest
practical time; and
    (ii) formulate a recommendation as to the proposed participation,
including the amount of the proposed Follow-On Investment, by each
Regulated Fund.
    (b) A Regulated Fund may participate in such Follow-On Investment
without obtaining prior approval of the Required Majority if: (i) the
proposed participation of each Co-Investment Affiliate in such
investment is proportionate to its outstanding investments in the
issuer immediately preceding the Follow-On Investment; and (ii) the
board of directors of the Regulated Fund has approved as being in the
best interests of the Regulated Fund the ability to participate in
Follow-On Investments on a pro rata basis (as described in greater
detail in the application). In all other cases, the Adviser will
provide its written recommendation as to the Regulated Fund's
participation to the Eligible Directors, and the Regulated Fund will
participate in such Follow-On Investment solely to the extent that a
Required Majority determines that it is in the Regulated Fund's best
interests.
    (c) If, with respect to any Follow-On Investment:
    (i) the amount of the opportunity is not based on the Co-Investment
Affiliates' outstanding investments immediately preceding the Follow-On
Investment; and
    (ii) the aggregate amount recommended by the Adviser to be invested
by the Regulated Fund in the Follow-On Investment, together with the
amount proposed to be invested by the participating Co-Investment
Affiliates in the same transaction, exceeds the amount of the
opportunity;
then the amount invested by each such party will be allocated among
them pro rata based on each party's Available Capital in the asset
class being allocated, up to the amount proposed to be invested by
each.

    (d) The acquisition of Follow-On Investments as permitted by this
condition will be considered a Co-Investment Transaction for all
purposes and subject to the other conditions set forth in the
application.
    9. The Independent Directors of each Regulated Fund will be
provided quarterly for review all information concerning Potential Co-
Investment Transactions and Co-Investment Transactions, including
investments made by other Co-Investment Affiliates that the Regulated
Fund considered but declined to participate in, so that the Independent
Directors may determine whether all investments made during the
preceding quarter, including those investments that the Regulated Fund
considered but declined to participate in, comply with the conditions
of the Order. In addition, the Independent Directors will consider at
least annually the continued appropriateness for the Regulated Fund of
participating in new and existing Co-Investment Transactions.
    10. Each Regulated Fund will maintain the records required by
section 57(f)(3) of the Act as if each of the Regulated Funds were a
BDC and each of the investments permitted under these conditions were
approved by the Required Majority under section 57(f).
    11. No Independent Director will also be a director, general
partner, managing member or principal, or otherwise an ``affiliated
person'' (as defined in the Act), of any of the Private Funds.
    12. The expenses, if any, associated with acquiring, holding or
disposing of any securities acquired in a Co-Investment Transaction
(including, without limitation, the expenses of the distribution of any
such securities registered for sale under the Securities Act) will, to
the extent not payable by the Adviser under its respective investment
advisory agreements with the Co-Investment Affiliates, be shared by the
Co-Investment Affiliates in proportion to the relative amounts of the
securities held or being acquired or disposed of, as the case may be.
    13. Any transaction fee (including break-up or commitment fees but
excluding broker's fees contemplated by section 17(e) or 57(k), as
applicable) received in connection with a Co-Investment Transaction
will be distributed to the participating Co-Investment Affiliates on a
pro rata basis based on the amounts they invested or committed, as the
case may be, in such Co-Investment Transaction. If any transaction fee
is to be held by the Adviser pending consummation of the transaction,
the fee will be deposited into an account maintained by the Adviser at
a bank or banks having the qualifications prescribed in section
26(a)(1), and the account will earn a competitive rate of interest that
will also be divided pro rata among the participating Co-Investment
Affiliates based on the amounts they invest in such Co-Investment
Transaction. None of the Adviser, the Co-Investment Affiliates nor any
affiliated person of the Co-Investment Affiliates will receive
additional compensation or remuneration of any kind as a result of or
in connection with a Co-Investment Transaction (other than (a) in the
case of the participating Co-Investment Affiliates, the pro rata
transaction fees described above and fees or other compensation
described in condition 2(c)(iii)(C), and (b) in the case of the
Adviser, investment advisory fees paid in accordance with the
respective agreements between the Adviser and the Co-Investment
Affiliates).

    For the Commission, by the Division of Investment Management,
under delegated authority.
Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2014-06465 Filed 3-24-14; 8:45 am]
BILLING CODE 8011-01-P


9. Table 9 to subpart VVVVVV of part 63 is amended by:
    a. Revising the entry for 63.6(e)(1)(i) and (ii), (e)(3) and
(f)(1);
    b. Removing the entry for 63.7(a)(2), (b), (d), (e)(1)-(e)(3);
    c. Adding a new entry for 63.7(a)(2), (b), (d), (e)(2)-(e)(3);
    d. Adding a new entry for 63.7(e)(1);
    e. Removing the entry for 63.8(a)(1), (a)(4), (b), (c)(1)-(c)(3),
(f)(1)-(5);
    f. Adding new entries for 63.8(a)(1), (a)(4), (b), (c)(1)(ii),
(c)(2)-(c)(3), (f)(1)-(5), and 63.8(c)(1)(i) and 63.8(c)(1)(iii);
    g. Removing the entry for 63.8(c)(6)-(c)(8), (d), (e), (f)(6);
    h. Adding new entries for 63.8(c)(6)-(c)(8), (d)(1)-(d)(2), (e),
(f)(6) and 63.8(d)(3);
    i. Removing the entry for 63.10(b)(2)(i)-(b)(2)(v);
    j. Adding new entries for 63.10(b)(2)(i), 63.10(b)(2)(ii),
63.10(b)(2)(iii), and 63.10(b)(2)(iv)-(v);
    k. Removing the entry for 63.10(c)(7)-(c)(8), (c)(10)-(c)(12),
(c)(15);
    l. Adding new entries for 63.10(c)(7)-(8), 63.10(c)(10),
63.10(c)(11), 63.10(c)(12) and 63.10(c)(15); and
    m. Revising the entry for 63.10(d)(5) to read as follows:

           Table 9 to Subpart VVVVVV of Part 63--Applicability of General Provisions to Subpart VVVVVV
----------------------------------------------------------------------------------------------------------------
                                                          Applies to Subpart
             Citation                     Subject               VVVVVV                    Explanation
----------------------------------------------------------------------------------------------------------------

                                                  * * * * * * *

                                                  * * * * * * *
63.6(e)(1)(i) and (ii), (e)(3),    SSM Requirements....  No.................  See Sec.   63.11495(d) for general
 and (f)(1).                                                                   duty requirement.

                                                  * * * * * * *
63.7(a)(2), (b), (d), (e)(2)-      Performance Testing   Yes/No.............  Requirements apply if conducting
 (e)(3).                            Schedule,                                  test for metal HAP control;
                                    Notification of                            requirements in Sec.  Sec.
                                    Performance Test,                          63.997(c)(1), (d), (e) and Sec.
                                    Performance Testing                        63.999(a)(1) apply, as referenced
                                    Facilities, and                            in Sec.   63.11496(g), if
                                    Conduct of                                 conducting test for organic HAP
                                    Performance Tests.                         or hydrogen halide and halogen
                                                                               HAP control device.
63.7(e)(1).......................  Performance Testing.  No.................  See Sec.   63.11496(f)(3)(ii) if
                                                                               conducting a test for metal HAP
                                                                               emissions. See Sec.  Sec.
                                                                               63.11496(g) and 63.997(e)(1) if
                                                                               conducting a test for continuous
                                                                               process vents or for hydrogen
                                                                               halide and halogen emissions. See
                                                                               Sec.  Sec.   63.11496(g) and
                                                                               63.2460(c) if conducting a test
                                                                               for batch process vents.
63.8(a)(1), (a)(4), (b),           Monitoring            Yes................  ..................................
 (c)(1)(ii), (c)(2)-(c)(3),         Requirements.
 (f)(1)-(5).
63.8(c)(1)(i)....................  General Duty to       No.................  ..................................
                                    Minimize Emissions
                                    and CMS Operation.

63.8(c)(1)(iii)..................  Requirement to        No.................  ..................................
                                    Develop SSM Plan
                                    for CMS.

                                                  * * * * * * *
63.8(c)(6)-(c)(8), (d)(1)-(d)(2),  ....................  Yes................  Requirements apply only if you use
 (e), (f)(6).                                                                  a continuous emission monitoring
                                                                               system (CEMS) to demonstrate
                                                                               compliance with the alternative
                                                                               standard in Sec.   63.11496(e).
63.8(d)(3).......................  Written Procedures    Yes................  Requirement applies except for
                                    for CMS.                                   last sentence, which refers to an
                                                                               SSM plan. SSM plans are not
                                                                               required.

                                                  * * * * * * *
63.10(b)(2)(i)...................  Recordkeeping of      No.................  See Sec.   63.11501(c)(8) for
                                    Occurrence and                             recordkeeping of occurrence and
                                    Duration of                                duration of each startup and
                                    Startups and                               shutdown for continuous process
                                    Shutdowns.                                 vents that are subpart to Table 3
                                                                               to this subpart.
63.10(b)(2)(ii)..................  Recordkeeping of      No.................  See Sec.   63.11501(c)(1)(vii) and
                                    Malfunctions.                              (viii) for recordkeeping of (1)
                                                                               occurrence and duration and (2)
                                                                               actions taken during malfunction.
63.10(b)(2)(iii).................  Maintenance Records.  Yes................  ..................................
63.10(b)(2)(iv) and (v)..........  Actions Taken to      No.................  ..................................
                                    Minimize Emissions
                                    During SSM.

                                                  * * * * * * *
63.10(c)(7)-(8)..................  Additional            Yes................  ..................................
                                    Recordkeeping
                                    Requirements for
                                    CMS--Identifying
                                    Exceedances and
                                    Excess Emissions.
63.10(c)(10).....................  Recordkeeping Nature  No.................  See Sec.   63.11501(c)(1)(vii) and
                                    and Cause of                               (viii) for malfunctions
                                    Malfunctions.                              recordkeeping requirements.
63.10(c)(11).....................  Recording Corrective  No.................  See Sec.   63.11501(c)(1)(vii) and
                                    Actions.                                   (viii) for malfunctions
                                                                               recordkeeping requirements.
63.10(c)(12).....................  ....................  Yes................  ..................................
63.10(c)(15).....................  Use of SSM Plan.....  No.................  ..................................

                                                  * * * * * * *
63.10(d)(5)......................  SSM Reports.........  No.................  See Sec.   63.11501(d)(8) for
                                                                               reporting requirements for
                                                                               malfunctions.

                                                  * * * * * * *
----------------------------------------------------------------------------------------------------------------

[FR Doc. 2012-1610 Filed 1-27-12; 8:45 am]
BILLING CODE 6560-50-P