[Federal Register Volume 78, Number 127 (Tuesday, July 2, 2013)]
[Notices]
[Pages 39784-39789]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2013-15842]


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SECURITIES AND EXCHANGE COMMISSION

[Investment Company Act Release No. 30581; 813-180-09]


Invesco Advisers, Inc., et al.; Notice of Application

June 26, 2013.
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 (``Act'') granting an exemption 
from all provisions of the Act, except sections 9, 17, 30 and 36 
through 53, and the rules and regulations under the Act (the ``Rules 
and Regulations''). With respect to sections 17(a), (d), (e), (f), (g), 
and (j) of the Act, sections 30(a), (b), (e), and (h) of the Act and 
the Rules and Regulations, and rule 38a-1 under the Act, applicants 
request a limited exemption as set forth in the application.

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Summary of Application: Applicants request an order to exempt certain 
limited partnerships and other entities formed for the benefit of 
eligible employees of Invesco Ltd. and its affiliates from certain 
provisions of the Act. Each such entity will be an ``employees' 
securities company'' within the meaning of section 2(a)(13) of the Act.

Applicants: Invesco Advisers, Inc. (``Invesco''), Chancellor Employees' 
Direct Fund I, L.P., Chancellor Employees' Partnership Fund I, L.P. 
(the ``Initial Partnerships''), INVESCO ESC Real Estate Fund I, L.P., 
INVESCO ESC Real Estate Fund II, L.P., WLR IV Parallel ESC, L.P., 
INVESCO Employees' Partnership Fund II, L.P., INVESCO Employees' Direct 
Fund V, L.P., INVESCO Employees' Partnership Fund III, L.P., INVESCO 
Employees' Partnership Fund IV, L.P., IPC Employees Partnership Fund 
III, L.L.C., IPC Employees' Direct Fund V, L.L.C., INVESCO ESC 
Partnership Fund II, L.L.C. (the ``Additional Funds,'' together with 
the Initial Partnerships, the ``Existing Funds''), and Invesco Ltd.

Filing Dates: The application was filed on December 11, 1997, and 
amended on March 17, 1998, July 16, 1998, January 6, 1999, June 1, 
1999, January 7, 2004, July 22, 2011, August 8, 2012, June 24, 2013, 
and June 25, 2013.

Hearing or Notification of Hearing: An order granting the application 
will be issued unless the Commission orders a hearing. Interested 
persons may request a hearing by writing to the Commission's Secretary 
and serving applicants with a copy of the request, personally or by 
mail. Hearing requests should be received by the Commission by 5:30 
p.m. on July 22, 2013, 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: Elizabeth M. Murphy, Secretary, U.S. Securities and Exchange 
Commission, 100 F Street NE., Washington, DC 20549-1090; Applicants, 
1555 Peachtree Street NE., Atlanta, GA 30309.

FOR FURTHER INFORMATION CONTACT: Bruce R. MacNeil, Senior Counsel, at 
(202) 551-6817, or Daniele Marchesani, Branch Chief, at (202) 551-6821 
(Division of Investment Management, Exemptive Applications Office).

SUPPLEMENTARY INFORMATION: The following is a summary of the 
application. The complete application may be obtained via the 
Commission's Web site by searching for the file number, or an applicant 
using the Company name box, at http://www.sec.gov/search/search.htm or 
by calling (202) 551-8090.

Applicants' Representations: *

    1. Invesco Ltd. is a global money management company organized 
under the laws of Bermuda. Invesco, a Delaware corporation, provides 
investment management and distribution services to pension plans, 
foundations, financial institutions and other global clients and is a 
wholly-owned subsidiary of Invesco Ltd. Invesco is registered as an 
investment adviser under the Investment Advisers Act of 1940 
(``Advisers Act''). Invesco Ltd. and its affiliates, as defined in rule 
12b-2 under the Securities Exchange Act of 1934 (the ``1934 Act''), are 
referred to collectively as the ``Invesco Group'' and individually as 
an ``Invesco Group entity.''
    2. The Invesco Group has formed the Existing Funds and may from 
time to time organize additional entities (together with the Existing 
Funds, the

[[Page 39785]]

``Funds''). Each Fund will be a limited partnership, business trust, 
limited liability company or any other entity, formed or organized 
under the laws of the State of Delaware or another jurisdiction, 
including outside the United States.
    3. The Funds have been or will be established primarily for the 
benefit of certain current or former employees and current persons on 
retainer, including but not limited to, Consultants \1\ of the Invesco 
Group, as part of a program designed to create capital building 
opportunities that are competitive with those at other financial 
service firms and to facilitate its recruitment and retention of high 
caliber professionals. Each Fund will be an ``employees' securities 
company'' within the meaning of section 2(a)(13) of the Act. Each of 
the Funds will operate as a diversified or non-diversified closed-end 
management investment company within the meaning of the Act. All 
members or limited partners of a Fund, other than the Manager (defined 
below) are ``Participants'' and any partner of a partnership or member 
of a limited liability company a ``Unitholder.'' The Invesco Group will 
control the Funds within the meaning of section 2(a)(9) of the Act.
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    \1\ A ``Consultant'' is a person who Invesco Group 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 Invesco Group 
and its employers.
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    4. Each Fund will have a manager that is an Invesco Group entity 
(``Manager'').\2\ The Manager will manage, operate and control each of 
the Funds. The Manager will be authorized to delegate to another 
Invesco Group entity or to a committee of Invesco Group employees 
(including, without limitation, the managers of the Funds) such 
management responsibility. The Manager of the Initial Partnerships is 
registered as an investment adviser under the Advisers Act and any 
other Manager will register as an investment adviser if required under 
applicable law. Applicants represent and concede that the Manager in 
managing a Fund is an ``investment adviser'' within the meaning of 
sections 9 and 36 of the Act and is subject to those sections.
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    \2\ Invesco Private Capital Investments, Inc. is the Manager of 
Chancellor Employees' Direct Fund I, L.P., Chancellor Employees' 
Partnership Fund I, L.P., INVESCO Employees' Direct Fund V, L.P., 
INVESCO Employees' Partnership Fund III, L.P. and INVESCO Employees' 
Partnership Fund IV, L.P.; IRI Fund I, L.P. is the Manager of 
INVESCO ESC Real Estate Fund I, L.P.; IRI Fund II, L.P. is the 
Manager of INVESCO ESC Real Estate Fund II, L.P.; Invesco WLR IV 
Associates LLC is the Manager of WLR Parallel ESC IV, L.P.; Invesco 
ESC Partnership Fund II, L.L.C. is the Manager of INVESCO Employees' 
Partnership Fund II, L.P.; Invesco Private Capital, Inc. is the 
Manager of IPC Employees' Partnership Fund III, L.L.C., INVESCO ESC 
Partnership Fund II, L.L.C. and IPC Employees' Direct Fund V, L.L.C.
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    5. The Manager, the Invesco Group or any employees of the Manager 
or the Invesco Group may be entitled to receive compensation or a 
performance-based fee (a ``carried interest'') \3\ based on the gains 
and losses of the investment program or of the Fund's investment 
portfolio or, if applicable, of the Client Funds (as defined below) in 
which the Fund may hold an interest.
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    \3\ A carried interest is an allocation to the Manager based on 
the net gains of an investment program and is in addition to the 
amount that is allocable to the Manager in proportion to its capital 
contributions. A Manager that is registered 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 Manager that is not 
registered under the Advisers Act will be structured to comply with 
section 205(b)(3) of the Advisers Act (with the Fund treated as 
though it were a business development company solely for purposes of 
that section).
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    6. Interests in a Fund (``Units'') 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, Qualified Participants (each 
as defined below) or Invesco Group entities. Prior to offering Units to 
an Eligible Employee or Eligible Family Member (as defined below), the 
Manager must reasonably believe that such individual will be a 
sophisticated investor capable of understanding and evaluating the 
risks of participating in the Fund without the benefit of regulatory 
safeguards and can afford a complete loss of such investment. 
Participation in a Fund will be voluntary. No sales load or similar fee 
of any kind will be charged in connection with the sale of Units.
    7. An ``Eligible Employee'' is an individual who is a current or 
former officer, director, employee or current person on retainer, 
including, but not limited to, Consultants of the Invesco Group and (a) 
meets the standard of an ``accredited investor'' under rule 501(a)(5) 
or rule 501(a)(6) of Regulation D, or (b) qualifies as an ``Other 
Investor.'' To qualify as an Other Investor, an individual must meet 
the conditions of Rule 506(b)(2) of Regulation D and be a 
``knowledgeable employee,'' as defined in Rule 3c-5 under the Act, of 
such Fund (with the Fund treated as though it were a ``covered 
company'' for purposes of such rule). A maximum of 35 individuals may 
become Participants in a Fund as an Other Investor.
    8. In the discretion of the Manager of a Fund and at the request of 
an Eligible Employee, Units may be assigned by such Eligible Employee, 
or sold directly by the Fund, to a Qualified Participant of an Eligible 
Employee. In order to qualify as a ``Qualified Participant,'' an 
individual or entity must be an Eligible Family Member or Qualified 
Entity, respectively, of an Eligible Employee. An ``Eligible Family 
Member'' is a spouse, parent, child, spouse of child, brother, sister 
or grandchild, including step or adoptive relationships, of an Eligible 
Employee. If an Eligible Family Member is purchasing a Unit from a 
Unitholder or directly from the Fund, such Eligible Family Member must 
be an accredited investor. Eligible Employees may transfer their Units 
without consideration to Eligible Family Members who may not be 
accredited investors. A ``Qualified Entity'' 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; \4\ or (c) a trust or other entity established solely for the 
benefit of Eligible Family Members of an Eligible Employee. A Qualified 
Entity must be either an accredited investor or an entity for which an 
Eligible Employee or an Eligible Family Member is a settlor and 
principal investment decision-maker.
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    \4\ The inclusion of partnerships, corporations or other 
entities that are controlled by Eligible Employees in the definition 
of ``Qualified Entity'' is to enable such Eligible Employees to make 
investments in the Funds through personal investment vehicles for 
the purpose of implementing their personal and family investment and 
estate planning objectives. Eligible Employees will exercise 
investment discretion or control over these investment vehicles, 
thereby creating a close nexus between the Invesco Group and these 
investment vehicles.
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    9. The terms of a Fund will be fully disclosed to each Eligible 
Employee and, if applicable, to a Qualified Participant of such 
Eligible Employee, at the time they are invited to participate in the 
Fund. Each Eligible Employee and Qualified Participant will be 
furnished with a private placement memorandum and limited partnership 
agreement or limited liability company operating agreement (``Fund 
Agreement''). Any private placement memorandum of a particular Fund 
will set forth the specific investment objectives and strategies for 
such Fund. Each Fund will send its Unitholders audited financial 
statements within 120 days after the end of the fiscal year or as soon 
as practicable thereafter.\5\ In addition, as soon as practicable after 
the end of each tax year of a Fund, a report will be sent to each 
Participant setting forth the information with respect to the

[[Page 39786]]

Investor's share of income, gains, losses, credits, and other items for 
federal and state income tax purposes, resulting from the operation of 
the Fund during that year.
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    \5\ ``Audit'' will have the meaning defined in rule 1-02(d) of 
Regulation S-X.
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    10. Units in each Fund will be non-transferable except with the 
prior written consent of the Manager, and in any event, no person or 
entity will be admitted into the Fund as a Unitholder unless such 
person is an Eligible Employee, a Qualified Participant, or an Invesco 
Group entity.
    11. Units in the Initial Partnerships will not be subject to 
repurchase, cancellation or redemption, but one or more Funds may offer 
Units with certain repurchase rights. Upon termination of an Eligible 
Employee's employment, such Eligible Employee or his or her Qualified 
Participant will retain his or her limited partnership interest or 
limited liability company interest, as applicable, for the Existing 
Funds unless the Manager exercises its option to purchase his or her 
limited partnership interest or limited liability company interest, as 
applicable, and will be permitted to make additional capital 
contributions in fulfillment of such Eligible Employee's or Qualified 
Participant's capital commitment made prior to the termination of 
employment, but such Eligible Employee or Qualified Participant will 
not be permitted to make new capital commitments or investments or 
participate in other Funds.
    12. Subject to the terms of the applicable Fund Agreement, a Fund 
will be permitted to enter into transactions involving (a) an Invesco 
Group entity, (b) a portfolio company, (c) any Unitholder or person or 
entity affiliated with a Unitholder, (d) an investment fund or separate 
account that is organized for the benefit of investors or clients who 
are not affiliated with Invesco Group and over which an Invesco Group 
entity exercises investment discretion (a ``Third-Party Fund''), or any 
partnership in which a Third-Party Fund is a limited partner, or (e) 
any partner or other investor in a Third-Party Fund that is not 
affiliated with the Invesco Group (a ``Third-Party Investor''). These 
transactions may include a Fund's purchase or sale of an investment or 
an interest from or to any Invesco Group entity (including certain 
entities formed to make investments and managed by Invesco Group 
employees, as described in the application (a ``Client Fund'')) or 
Third-Party Fund, acting as principal. Prior to entering these 
transactions, the Manager must determine that the terms are fair to the 
Unitholders and the Fund, in addition to satisfying any requirements in 
the organizational document of the Third-Party Fund.
    13. A Fund will not acquire any security issued by a registered 
investment company if, immediately after such acquisition, the Fund 
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 the Funds from all the provisions of the Act, except 
sections 9, 17, 30, 36 through 53, and the Rules and Regulations. With 
respect to sections 17(a), (d), (e), (f), (g), and (j) and 30(a), (b), 
(e), and (h) 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) of the Act to permit 
(a) an Invesco Group entity (including, without limitation, a Client 
Fund) or a Third-Party Fund, acting as principal, to engage in any 
transaction directly or indirectly with any Fund or any company 
controlled by such Fund; (b) a Fund to invest in or engage in any 
transaction with any Invesco Group entity (including, without 
limitation, a Client Fund) or a Third-Party Fund, acting as principal, 
(i) in which the Fund, any company controlled by the Fund or any 
Invesco Group entity or a Third-Party Fund has invested or will invest, 
or (ii) with which such Fund, any company controlled by such Fund or 
any Invesco Group entity or Third-Party Fund is or will become 
otherwise affiliated; and (c) a Third-Party Investor, acting as 
principal, to engage in any transaction directly or indirectly with a 
Fund or any company controlled by the Fund.
    4. Applicants state that the relief is requested to ensure that 
each Fund will be able to invest in entities in which the Invesco 
Group, or its employees, officers, directors, members, managers, or 
partners may make or have already made an investment. Applicants 
further state that the relief is also requested to permit each Fund the 
flexibility to deal with its portfolio investments in the manner the 
Manager deems most advantageous to all Participants in the Fund, or as 
required by the Invesco Group or the Fund's other co-investors, 
including, without limitation, restructuring its investments, having 
its investments redeemed, tendering such Fund's securities or 
negotiating options or implementing exit strategies with respect to its 
investments.
    5. Applicants believe an exemption from section 17(a) is consistent 
with the policy of each Fund and the protection of investors and 
necessary to promote the basic purpose of such Fund. Applicants state 
that the Participants in each Fund will have been fully informed of the 
possible extent of such Fund's dealings with the Invesco Group, and as 
successful professionals employed in the investment management or 
financial services businesses, will be able to understand and evaluate 
the attendant risks. Applicants assert that the community of interest 
among the Participants in each Fund, on the one hand, and the Invesco 
Group, on the other hand, is the best insurance against any risk of 
abuse. Applicants, on behalf of the Funds, represent that any 
transactions otherwise subject to section 17(a) of the

[[Page 39787]]

Act, for which exemptive relief has not been requested, would require 
approval of the Commission.
    6. 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 an order to permit 
affiliated persons of each Fund, or affiliated persons of any of these 
persons, to participate in, or effect any transaction in connection 
with, any joint enterprise or other joint arrangement or profit-sharing 
plan in which the Fund or a company controlled by the Fund is a 
participant. The exemption requested would permit, among other things, 
co-investments by each Fund, the Manager, the Client Funds, the Co-
Investors \6\ and individual employees, officers, or directors of the 
Invesco Group making their own individual investment decisions apart 
from the Invesco Group.
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    \6\ ``Co-Investors'' means co-investing funds or separate 
accounts, other than the Funds or the Client Funds, that are 
organized or managed by an Invesco Group entity, are not affiliated 
with the Invesco Group (such as by having Invesco Group employees, 
officers or directors invested in them) and that will co-invest with 
the Client Funds on a pari passu basis.
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    7. Applicants assert that compliance with section 17(d) would cause 
a Fund to forego investment opportunities simply because a Participant 
in such Fund or other affiliated person of such Fund (or any affiliate 
of such a person) also had, or contemplated making, a similar 
investment. Applicants further assert that attractive investment 
opportunities of the types considered by a Fund often require each 
participant in the transaction to make funds available in an amount 
that may be substantially greater than may be available to such Fund 
alone. Applicants contend that, as a result, the only way in which a 
Fund may be able to participate in such opportunities may be to co-
invest with other persons, including its affiliates. Applicants assert 
that the flexibility to structure co-investments and joint investments 
will not involve abuses of the type section 17(d) and rule 17d-1 were 
designed to prevent.
    8. Applicants state that side-by-side investments held by a Third-
Party Fund, or by an Invesco Group entity in a transaction in which an 
Invesco Group investment was made pursuant to a contractual obligation 
to a Third-Party Fund, will not be subject to condition 3 below. 
Applicants assert that in structuring a Third-Party Fund, it is common 
for the unaffiliated investors of such fund to require that the Invesco 
Group invest its own capital in Third-Party Fund investments, either 
through the Third-Party Fund or on a side-by-side basis, and that the 
Invesco Group investments be subject to substantially the same terms as 
those applicable to the Third-Party Fund's investments. Applicants 
state that it is important that the interests of the Third-Party Fund 
take priority over the interests of the Funds, and that the activities 
of the Third-Party Fund not be burdened or otherwise affected by 
activities of the Funds. Applicants also state that the relationship of 
a Fund to a Third-Party Fund is fundamentally different from a Fund's 
relationship to the Invesco Group. Applicants contend that the focus 
of, and the rationale for, the protections contained in the application 
are to protect the Funds from any overreaching by the Invesco Group in 
the employer/employee context, whereas the same concerns are not 
present with respect to the Funds vis-[agrave]-vis the investors of a 
Third-Party Fund.
    9. 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 an Invesco Group entity 
(including the Manager), acting as agent or broker, to receive 
placement fees, advisory fees or other compensation from a Fund in 
connection with the purchase or sale by the Fund of securities, 
provided that the fees or other compensation can be deemed ``usual and 
customary.'' Applicants state that for purposes of the application, 
fees or other compensation will be deemed ``usual and customary'' only 
if (a) the Fund is purchasing or selling securities with other 
unaffiliated third parties (including Third-Party Funds) who are also 
similarly purchasing or selling securities, (b) the fees or 
compensation being charged to the Fund are also being charged to the 
unaffiliated third parties (including Third-Party Funds), and (c) the 
amount of securities being purchased or sold by the Fund does not 
exceed 50% of the total amount of securities being purchased or sold by 
the Fund and the unaffiliated third parties (including Third-Party 
Funds). Applicants assert that, because the Invesco Group does not wish 
to appear be favoring the Funds, compliance with section 17(e) would 
prevent a Fund from participating in transactions where the Fund would 
be charged lower fees than unaffiliated third parties. Applicants 
assert that the fees or other compensation paid by a Fund to an Invesco 
Group entity will be the same as those negotiated at arm's length with 
unaffiliated third parties.
    10. 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 Fund 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 Fund to comply with 
the rule without having a majority of the board of directors of Invesco 
(``Designated Board of Directors'') 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 as required by 
paragraph (c) of the rule. Applicants state that because the Designated 
Board of Directors will be interested persons of the Funds, without the 
relief requested, a Fund could not comply with rule 17e-1(b) and (c). 
Applicants state that each Fund will satisfy rule 17e-1(b) by having a 
majority of the Designated Board of Directors take actions and make 
approvals as set forth in rule 17e-1. Applicants state that each Fund 
will otherwise comply with rule 17e-1.
    11. 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) 
of the Act and the rule 17f-1(c) requirement that a copy of the 
executed custodian contract be transmitted to the Commission. 
Applicants believe that, because of the community of interest of all 
parties involved, and by maintaining such records themselves and making 
them available for examination by the Commission and its staff, 
compliance with this requirement would pose an unnecessary burden. 
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 of the parties involved, and the existing 
requirement for an independent audit, compliance with this requirement 
would be an unnecessary expense. Applicants will comply with all other 
requirements of rule 17f-1.

[[Page 39788]]

    12. Rule 17f-2 under the Act specifies requirements that must be 
satisfied for a registered management investment company to act as 
custodian of its own investments. Applicants request an exemption from 
section 17(f) and rule 17f-2 to permit the following exceptions from 
the requirements of rule 17f-2: (a) A Fund's investments may be kept in 
the locked files of the Manager; (b) for purposes of paragraph (d) of 
the rule, (i) employees of the Manager (or an Invesco Group entity) 
will be deemed to be employees of the Funds, (ii) officers or managers 
of the Manager of a Fund (or an Invesco Group entity) will be deemed to 
be officers of the Fund and (iii) the Designated Board of Directors 
will be deemed to be the board of directors of the Fund; and (c) in 
place of the verification procedure under paragraph (f) of the rule, 
verification will be effected quarterly by two employees of the Manager 
(or an Invesco Group entity). Applicants expect that many of the Funds' 
investments may be evidenced only by partnership agreements, 
participation agreements or similar documents, rather than by 
negotiable certificates that could be misappropriated. Applicants 
believe that these instruments are most suitably kept in the files of 
the Manager, where they can be referred to as necessary.
    13. 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. The rule also requires that the board of directors of 
an investment company relying on the rule satisfy the fund governance 
standards, as defined in rule 0-1(a)(7). Applicants request relief to 
permit the Designated Board of Directors, who may be deemed interested 
persons, to take actions and make determinations as set forth in the 
rule. Applicants state that, because all directors of the Designated 
Board of Directors will be affiliated persons, a Fund could not comply 
with rule 17g-1 without the requested relief. Applicants state that 
each Fund will comply with rule 17g-1 by having a majority of the 
Designated Board of Directors take actions and make determinations as 
set forth in rule 17g-1. Applicants also request an exemption from the 
requirements of rule 17g-1(g) and (h) relating to the filing of copies 
of fidelity bonds and related information with the Commission and the 
provision of notices to the board of directors and an exemption from 
the requirements of rule 17g-1(j)(3) relating to compliance with the 
fund governance standards. Applicants state that the Funds will comply 
with all other requirements of rule 17g-1.
    14. 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 burdensome and unnecessary as applied to the Funds.
    15. 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 Fund 
and would entail administrative and legal costs that outweigh any 
benefit to the Participants in such Fund. Applicants request relief to 
the extent necessary to permit each Fund to report annually to its 
Participants. Applicants also request relief from the requirements of 
section 30(h) to the extent necessary to exempt the Manager of each 
Fund, directors of the Manager, members of the Designated Board of 
Directors and any officer or other person who may be deemed members of 
an advisory board of a Fund, from filing Forms 3, 4, and 5 under 
section 16(a) of the 1934 Act with respect to their ownership of Units 
in such Fund. Applicants believe that, because there will be no trading 
market and the transfers of Units will be severely restricted, these 
filings are unnecessary for the protection of investors and burdensome 
to those required to make them.
    16. Rule 38a-1 requires investment companies to adopt, implement 
and periodically review written policies reasonably designed to prevent 
violation of the federal securities laws and to appoint a chief 
compliance officer. Applicants state that each Fund will comply with 
rule 38a-1(a), (c) and (d), except that (a) since the Fund does not 
have a board of directors, the Designated Board of Directors will 
fulfill the responsibilities assigned to the Fund's board of directors 
under the rule, (b) since the Designated Board of Directors 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) since the Designated Board of Directors does not have 
any disinterested members, the Funds will comply with the requirement 
in rule 38a-1(a)(4)(iv) that the chief compliance officer meet with the 
independent directors by having the chief compliance officer meet with 
the Designated Board of Directors 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-1 to which a Fund is a party (the 
``Section 17 Transactions'') will be effected only if the Manager 
determines that:
    (a) The terms of the transaction, including the consideration to be 
paid or received, are fair and reasonable to the Unitholders of such 
Fund and do not involve overreaching of such Fund or its Unitholders on 
the part of any person concerned; and
    (b) the transaction is consistent with the interests of the 
Unitholders of such Fund, such Fund's organizational documents and such 
Fund's reports to its Participants.
    In addition, the Manager of each Fund will record and preserve a 
description of Section 17 Transactions, the Manager's findings, the 
information or materials upon which the Manager's findings are based 
and the basis therefor. All such records will be maintained for the 
life of each Fund and at least six years thereafter, and will be 
subject to examination by the Commission and its staff. Each Fund will 
preserve the accounts, books and other documents required to be 
maintained in an easily accessible place for at least the first two 
years.
    2. The Manager of each Fund 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 Fund, or any 
affiliated person of such a person, promoter or principal underwriter.
    3. The Manager of each Fund will not invest the funds of such Fund 
in any

[[Page 39789]]

investment in which an ``Affiliated Co-Investor'' (as defined below) 
has acquired or proposes to acquire the same class of securities of the 
same issuer, where the investment involves a joint enterprise or other 
joint arrangement within the meaning of rule 17d-1 in which such Fund 
and an Affiliated Co-Investor are participants, unless any such 
Affiliated Co-Investor, prior to disposing of all or part of its 
investment (a) gives such Manager 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 such Fund has the 
opportunity to dispose of such Fund's investment prior to or 
concurrently with, and on the same terms as, and pro rata with the 
Affiliated Co-Investor. The term ``Affiliated Co-Investor'' with 
respect to any Fund means any person who is: (a) An ``affiliated 
person'' (as such term is defined in section 2(a)(3) of the Act) of the 
Fund (other than a Third-Party Fund or Third-Party Investor); (b) the 
Invesco Group; (c) an officer or director of the Invesco Group; or (d) 
an entity (other than a Third-Party Fund) in which the Manager acts as 
a general partner or has a similar capacity to control the sale or 
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 an Affiliated Co-Investor: (a) To its 
direct or indirect wholly-owned subsidiary, to any company (a 
``Parent'') of which such Affiliated Co-Investor is a direct or 
indirect wholly-owned subsidiary or to a direct or indirect wholly-
owned subsidiary of its Parent; (b) to immediate family members, 
including step and adoptive relationships, of such Affiliated Co-
Investor or a trust or other investment vehicle established for any 
Affiliated Co-Investor or any such family member; (c) when the 
investment is comprised of securities that are listed on any national 
securities exchange registered 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 11A(a)(2)-1 under the 1934 Act; or (e) when the investment is 
comprised of government securities as defined in section 2(a)(16) of 
the Act.
    4. Each Fund and its Manager will maintain and preserve, for the 
life of such Fund 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 Fund, and each annual report of such Fund 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 Fund 
will preserve the accounts, books and other documents required to be 
maintained in an easily accessible place for at least the first two 
years.
    5. The Manager of each Fund will send to each Participant who had 
an interest in any capital account of such Fund, at any time during the 
fiscal year then ended, Fund financial statements audited by such 
Fund's independent accountants within 120 days after the end of the 
fiscal year of each of the Funds or as soon as practicable thereafter. 
At the end of each fiscal year, the Manager will make a valuation or 
have a valuation made of all of the assets of the Fund as of such 
fiscal year end in a manner consistent with customary practice with 
respect to the valuation of assets of the kind held by the Fund. In 
addition, as soon as practicable after the end of each fiscal year, the 
Manager of such Fund will send a report to each person who was a 
Participant in such Fund 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 federal and state 
income tax returns and a report of the investment activities of the 
Fund during such year.
    6. In any case where purchases or sales are made by a Fund from or 
to an entity affiliated with the Fund by reason of a director, officer 
or employee of Invesco Group (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 such Fund's determination of whether or not to effect such purchase 
or sale.

    For the Commission, by the Division of Investment Management, 
under delegated authority.
Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2013-15842 Filed 7-1-13; 8:45 am]
BILLING CODE 8011-01-P