[Federal Register Volume 79, Number 169 (Tuesday, September 2, 2014)]
[Notices]
[Pages 52076-52077]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2014-20699]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-72917; File No. TP 14-14]


Order Granting a Limited Exemption From Rule 102(a) of Regulation 
M to Jones Lang LaSalle Income Property Trust Pursuant to Rule 102(e) 
of Regulation M

August 26, 2014.
    By letter dated August 26, 2014 (``Letter''), as supplemented by 
conversations with the staff of the Division of Trading and Markets 
(``Staff''), counsel for Jones Lang LaSalle Income Property Trust (the 
``Company''), a publicly registered non-listed, daily valued perpetual-
life real estate investment trust, requested on behalf of the Company 
that the Securities and Exchange Commission (``Commission'') grant an 
exemption from Rule 102(a) of Regulation M in connection with the 
tender offer by the Company (the ``Tender Offer'').\1\ Specifically, 
the Letter requests that the Commission exempt the Company from the 
requirements of Rule 102(a) so that the Company may conduct the Tender 
Offer for its Class M shares (the ``Shares'' or ``Share'') during the 
course of the continuous offering of the Shares of the Company.
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    \1\ 17 CFR 242.102(a).
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    Rule 102(a) of Regulation M specifically prohibits issuers, selling 
security holders, and any of their affiliated purchasers from directly 
or indirectly bidding for, purchasing, or attempting to induce another 
person to bid for or purchase, a covered security until the applicable 
restricted period has ended. As a consequence of the continuous 
offering of the Shares, the Company will be engaged in a distribution 
of the Shares for purposes of Rule 102 of Regulation M. As a result, 
bids for or purchases of Shares or any reference security by the 
Company or any affiliated purchaser of the Company, including engaging 
in the Tender Offer, are prohibited during the restricted period under 
Rule 102 of Regulation M, unless specifically excepted by or exempted 
from Rule 102 of Regulation M.
    The Company represents that they operate a share repurchase plan 
(the ``Repurchase Plan'') which serves as the primary source of 
liquidity for the Company's stockholders.\2\ According to the Company, 
a large number of Shares will become eligible for the Repurchase Plan 
on October 1, 2014. The Company is concerned that once the Shares 
become eligible for the Repurchase Plan there will potentially be 
excess repurchase demand that the Company would be unable to meet under 
current program limits.\3\
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    \2\ The Company represents that the Repurchase Plan meets the 
conditions for a class exemption from Rule 102(a) of Regulation M. 
See Letter from James A. Brigagliano, Associate Director, to Dennis 
O. Garris, Alston & Bird LLP regarding Class Relief for REIT Share 
Redemption Programs (October 22, 2007) (the ``Class Relief'').
    \3\ As explained by the Company, the Repurchase Plan limits 
repurchases during any calendar quarter to shares with an aggregate 
value (based on the repurchase price per share on the day the 
repurchase is effected) of 5% of the combined NAV of all classes of 
shares (including classes of Company shares other than the Shares) 
as of the last day of the previous calendar quarter, which means 
that in any 12-month period, the Company limits its repurchase to 
approximately 20% of its total NAV.
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    In order to address the potential excess repurchase demand by 
holders of the Shares, the Company plans to conduct the Tender Offer in 
lieu of the Repurchase Plan in order to provide a limited source of 
liquidity to the holders of Shares who may desire to exit all or a 
portion of their investment in the Company in advance of October 1, 
2014. Shares will be purchased in the Tender Offer at a price equal to 
the NAV per Share as calculated at the close of business on the day 
prior to the launch of the Tender Offer, which price will be disclosed 
in compliance with Rule 13e-4. However, for any day during the Tender 
Offer period that the purchase price may exceed the NAV, the Company 
will adjust the purchase price for Shares purchased in the Tender

[[Page 52077]]

Offer and disclose any such adjustments in accordance with Rule 13e-4 
so that the purchase price is not greater than the NAV per Share on 
that day.
    The request is similar to the Class Relief for unlisted REITs.\4\ 
In particular, the Company represents that the Tender Offer is designed 
to provide a limited source of liquidity for the Company's shareholders 
as there is no trading market for the Shares.\5\ Furthermore, according 
to the Company, the terms of the Tender Offer will be fully disclosed 
because the Tender Offer will be conducted pursuant to the substantive, 
procedural, and disclosure requirement of Rule 13e-4, thus minimizing 
potential manipulative effects. Additionally, the Tender Offer price 
will not be greater than the NAV per Share for any day during the 
Tender Offer period. Because the price at which the Shares are sold and 
the price at which the Shares will be purchased in the tender offer are 
both based on the NAV per Share and the Tender Offer will be adjusted 
as described above, which will result in the Tender Offer price never 
being higher than the price at which the Company sells Shares during 
the Tender Offer, the opportunity to manipulate the price at which the 
Shares are being offered or repurchased is minimized.
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    \4\ Class Relief, supra note 2.
    \5\ The Company represents that it has no intention to list its 
shares of common stock for trading on a national securities exchange 
or other over-the-counter trading market.
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    As a condition of the relief, the Company must terminate the Tender 
Offer should a secondary trading market for the Shares develop. As a 
result, the exemptive relief granted to the Company for the Tender 
Offer should not have a manipulative effect on the applicable 
distribution. Additionally, this exemptive relief is further 
conditioned on the Tender Offer price not being greater than the NAV 
per Share for any day during the Tender Offer period. This should help 
reduce the potential for the Tender Offer having a manipulative effect 
on the price of such distributions as the purchases should not improve 
the offering price. Accordingly, we find that it is appropriate in the 
public interest and is consistent with the protection of investors to 
grant a conditional exemption from Rule 102(a) to permit the Company to 
engage in the Tender Offer for the Shares during the applicable 
restricted period.

Conclusion

    It is hereby ordered, pursuant to Rule 102(e), that the Company is 
exempt from Rule 102(a) for the limited purpose of engaging in the 
Tender Offer for the Shares during the applicable restricted period, 
subject to the following conditions:
     The Company shall terminate the Tender Offer if a 
secondary market for the Shares being tendered develops;
     The Tender Offer price will not be greater than the NAV 
per Share for any day during the Tender Offer period; and
     The Company will be in compliance with Rule 13e-4 at all 
times during the Tender Offer period.
    This exemption is subject to modification or revocation at any time 
the Commission determines that such action is necessary or appropriate 
in furtherance of the purposes of the Securities Exchange Act of 1934, 
as amended (``Exchange Act''). Furthermore, the exemption is strictly 
limited to the application of Rule 102 to the Tender Offer as described 
above. The Tender Offer should be discontinued, pending presentation of 
the facts for our consideration, in the event that any material change 
occurs with respect to any of the facts or representations. In 
addition, persons relying on this exemption are directed to the 
antifraud and anti-manipulation provisions of the federal securities 
laws, particularly Section 10(b) of the Exchange Act, and Rule 10b-5 
thereunder. Responsibility for compliance with these and any other 
applicable provisions of the federal securities laws must rest with the 
persons relying on this exemption. This order should not be considered 
a view with respect to any other question that the transactions may 
raise, including, but not limited to the adequacy of the disclosure 
concerning, and the applicability of other federal or state laws to, 
such transactions.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\6\
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    \6\ 17 CFR 200.30-3(a)(6).
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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2014-20699 Filed 8-29-14; 8:45 am]
BILLING CODE P