[Federal Register Volume 86, Number 180 (Tuesday, September 21, 2021)]
[Notices]
[Pages 52524-52529]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-20323]



[[Page 52524]]

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SECURITIES AND EXCHANGE COMMISSION

[Investment Company Act Release No. 34365A; 813-00393]


Point72 Employee Investment Fund, L.P. and Point72 Asset 
Management, L.P.

September 15, 2021.
AGENCY: Securities and Exchange Commission (``Commission'').

ACTION: Notice.

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

Summary of Application:  Applicants request an order to exempt certain 
limited partnerships, limited liability companies, business trusts or 
other entities (``Funds'') formed for the benefit of eligible employees 
of Point72 Asset Management, L.P. (``Point72'') and its affiliates from 
certain provisions of the Act. Each series of a Fund will be an 
``employees' securities company'' within the meaning of section 
2(a)(13) of the Act.\1\
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    \1\ The Commission issued a notice of application on August 26, 
2021, Release No. IC-34365 (``Notice''). Due to a clerical error, 
the Notice was not published in the Federal Register and, therefore, 
the Commission is now publishing this notice in the Federal 
Register.

Applicants:  Point72 Employee Investment Fund, L.P. and Point72 Asset 
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Management, L.P.

Filing Dates:  The application was filed on September 28, 2018 and 
amended on July 21, 2020, and June 16, 2021.

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 emailing the Commission's 
Secretary at [email protected] and serving applicants with a 
copy of the request by email. Hearing requests should be received by 
the Commission by 5:30 p.m. on October 12, 2021, and should be 
accompanied by proof of service on the applicants, in the form of an 
affidavit or, for lawyers, a certificate of service. Pursuant to rule 
0-5 under the 1940 Act, hearing requests should state the nature of the 
writer's interest, any facts bearing upon the desirability of a hearing 
on the matter, the reason for the request, and the issues contested. 
Persons who wish to be notified of a hearing may request notification 
by emailing the Commission's Secretary at [email protected].

ADDRESSES: The Commission: [email protected]. Applicants: 
Jessica Forbes, Esq. [email protected].

FOR FURTHER INFORMATION CONTACT: Bruce R. MacNeil, Senior Counsel, at 
(202) 551-6817, or Nadya Roytblat, Assistant Director, at (202) 551-
6825 (Division of Investment Management, Chief Counsel's Office).

SUPPLEMENTARY INFORMATION: The following is a summary of the 
application. The complete application may be obtained via the 
Commission's website 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 (202) 551-8090.

Applicants' Representations

    1. Point72 Asset Management. L.P. and its ``affiliates,'' as 
defined in rule 12b-2 under the Securities Exchange Act of 1934 (the 
``Exchange Act'') (collectively, ``Point72,'' and each, a ``Point72 
Entity''), have organized Point72 Employee Investment Fund, L.P., a 
Delaware limited partnership (the ``Initial Partnership'') and will in 
the future organize limited partnerships, limited liability companies, 
business trusts or other entities (each a ``Future Fund'' and, 
collectively with the Initial Partnership, the ``Funds'') as 
``employees' securities companies,'' as defined in section 2(a)(13) of 
the Act. The Funds are intended to provide investment opportunities 
that are competitive with those at other investment management and 
financial services firms and to facilitate the recruitment and 
retention of high caliber professionals.
    2. The Initial Partnership was formed on August 17, 2018 as a 
Delaware limited partnership. Point72 Capital Management, LLC acts as 
general partner to the Initial Partnership. Point72 serves as 
investment adviser to the Initial Partnership. The Initial Partnership 
currently invests substantially all of its assets in private investment 
funds managed by Point72 (each, a ``Subsidiary Fund''). The investments 
of the Initial Partnership and the Subsidiary Funds may include, 
without limitation, equities, secured and unsecured debt, futures, 
forward contracts, options, convertible bonds, derivative instruments, 
swaps, currencies, commodities and pooled investment vehicles managed 
by third parties.
    3. A Future Fund may be structured as a domestic or offshore 
limited or general partnership, limited liability company, corporation, 
business trust or other entity. Point72 may also form parallel funds 
organized under the laws of various jurisdictions in order to create 
the same investment opportunities for Eligible Employees (defined 
below) in other jurisdictions. Interests in a Fund may be issued in one 
or more series, each of which corresponds to particular Fund 
investments (each, a ``Series''). Each Series will be an ``employees' 
securities company'' within the meaning of section 2(a)(13) of the Act. 
A Future Fund may operate as a ``diversified'' or ``non-diversified'' 
vehicle within the meaning of the Act. The investment objectives and 
policies may vary from one Future Fund to the next.
    4. Point72 will control each Fund within the meaning of section 
2(a)(9) of the Act. Each Fund has, or will have, a Point72 Entity 
serving as a general partner, managing member or other such similar 
entity that manages, operates and controls such Fund (a ``General 
Partner''). The General Partner will be responsible for the overall 
management of the Fund. The General Partner may appoint a Point72 
Entity to serve as investment adviser (``Investment Adviser'') to a 
Fund and delegate to the Investment Adviser the authority to make all 
decisions regarding the acquisition, management and disposition of Fund 
investments.
    5. Each of the General Partner and the Investment Adviser will be 
an investment adviser within the meaning of sections 9 and 36 of the 
Act and subject to those sections. The Investment Adviser expects to be 
paid a management fee for its services to a Fund. The General Partner 
or Investment Adviser may receive a performance-based fee or allocation 
(an ``Incentive Fee'') based on the net gains of the Fund's 
investments, in addition to any amount allocable to the General 
Partner's or Investment Adviser's capital contribution.\2\ Point72 will 
not receive

[[Page 52525]]

any management fee or other compensation at both the Fund level and the 
Underlying Fund (as defined below) level with respect to a Fund's 
investment in an Underlying Fund (so as to avoid duplication).
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    \2\ If a General Partner or Investment Adviser is registered 
under the Investment Advisers Act of 1940 (``Advisers Act''), the 
Incentive Fee payable to it by a Fund will be pursuant to an 
arrangement that complies with rule 205-3 under the Advisers Act. 
All or a portion of the Incentive Fee may be paid to individuals who 
are officers, employees or equity holders of the Investment Adviser 
or its affiliates. If the General Partner or Investment Adviser is 
not required to register under the Advisers Act, the Incentive Fee 
payable to it will comply with section 205(b)(3) of the Advisers Act 
(with such Fund treated as though it were a business development 
company solely for the purpose of that section).
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    6. If the General Partner elects to recommend that a Fund enter 
into any side-by-side investment with an unaffiliated entity, the 
General Partner will be permitted to engage as sub-investment adviser 
the unaffiliated entity (an ``Unaffiliated Subadviser''), which will be 
responsible for the management of such side-by-side investment.
    7. Interests in the Funds will be offered in a transaction exempt 
from registration under section 4(a)(2) of the Securities Act of 1933, 
as amended (the ``1933 Act''), or Regulation D or Regulation S 
promulgated thereunder, and will be sold only to Qualified 
Participants, which term refers to: (i) Eligible Employees (as defined 
below); (ii) Eligible Family Members (as defined below); (iii) Eligible 
Investment Vehicles (as defined below); and (iv) Point72. Prior to 
offering interests in a Fund to a Qualified Participant, Point72 must 
reasonably believe that the Eligible Employee or Eligible Family Member 
will be capable of understanding and evaluating the merits and risks of 
participation in a Fund and that each such individual is able to bear 
the economic risk of such participation and afford a complete loss of 
his or her investments in the Fund.
    8. The term ``Eligible Employees'' is defined as current or former 
employees, officers and directors of Point72 (including people in 
administration, marketing and operations) and current consultants 
engaged on retainer to provide services and professional expertise on 
an ongoing basis to Point72 (``Consultants'').\3\ The term ``Eligible 
Family Members'' is defined as spouses, parents, children, spouses of 
children, brothers, sisters and grandchildren of Eligible Employees, 
including step and adoptive relationships.\4\ The term ``Eligible 
Investment Vehicles'' is defined as: (i) A trust of which a trustee, 
grantor and/or beneficiary is an Eligible Employee; \5\ (ii) a 
partnership, corporation, or other entity controlled by an Eligible 
Employee; and (iii) a trust or other entity established solely for the 
benefit of Eligible Employees and/or Eligible Family Members. Each 
Eligible Employee and Eligible Family Member will be an Accredited 
Investor under rule 501(a)(5), 501(a)(6), 501(a)(10) or 501(a)(11) of 
Regulation D under the 1933 Act.
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    \3\ In order to participate in the Funds, Consultants must be 
currently engaged by Point72 and will be required to be 
sophisticated investors who qualify as accredited investors 
(``Accredited Investors'') under rule 501(a) of Regulation D. If a 
Consultant is an entity (such as, for example, a law firm or 
consulting firm), and the Consultant proposes to invest in the Fund 
through a partnership, corporation or other entity that is 
controlled by the Consultant, the individual participants in such 
partnership, corporation or other entity will be limited to senior 
level employees, members or partners of the Consultant who are 
responsible for the activities of the Consultant or the activities 
of the Consultant in relation to Point72 and will be required to 
qualify as Accredited Investors. In addition, such entities will be 
limited to businesses controlled by individuals who have levels of 
expertise and sophistication in the area of investments in 
securities that are comparable to other Eligible Employees who are 
employees, officers or directors of Point72 and who have an interest 
in maintaining an ongoing relationship with Point72. The individuals 
participating through such entities will belong to that class of 
persons who will have access to the directors and officers of the 
General Partner and its affiliates and/or the officers of Point72 
responsible for making investments for the Funds similar to the 
access afforded other Eligible Employees who are employees, officers 
or directors of Point72.
    \4\ In order to ensure that a close nexus between the Qualified 
Participants and Point72 is maintained, the terms of each governing 
document for a Fund will provide that any Eligible Family Member 
participating in such Fund (either through direct beneficial 
ownership of an interest or as an indirect beneficial owner through 
an Eligible Investment Vehicle) cannot, in any event, be more than 
two generations removed from an Eligible Employee.
    \5\ The inclusion of partnerships, corporations, or other 
entities controlled by an Eligible Employee in the definition of 
``Eligible Investment Vehicle'' is intended to enable Eligible 
Employees to make investments in the Funds through personal 
investment vehicles for the purpose of personal and family 
investment and estate planning objectives.
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    9. A Qualified Participant may purchase an interest through an 
Eligible Investment Vehicle only if either (i) the investment vehicle 
is an accredited investor, as defined in rule 501(a) of Regulation D 
under the 1933 Act or (ii) the Eligible Employee is a settlor \6\ and 
principal investment decision-maker with respect to the investment 
vehicle.
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    \6\ If such investment vehicle is an entity other than a trust, 
the term ``settlor'' will be read to mean a person who created such 
vehicle, alone or together with other eligible individuals, and 
contributed funds to such vehicle.
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    10. The terms of each Fund will be fully disclosed to each 
Qualified Participant (or person making the investment on behalf of the 
Qualified Participant) at the time the Qualified Participant is invited 
to participate in the Fund. The Fund will send its investors an annual 
financial statement with respect to those investments in which the 
investor had an interest within 120 days after the end of each fiscal 
year of the Fund, or as soon as practicable after the end of the Fund's 
fiscal year. The financial statement will be audited \7\ by independent 
certified public accountants. In addition, as soon as practicable after 
the end of each calendar year, a report will be sent to each investor 
setting forth the information with respect such investor's share of 
income, gains, losses, credits, and other items for U.S. federal and 
state income tax purposes resulting from the operation of the Fund 
during that year.
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    \7\ ``Audit'' has the meaning defined in rule 1-02(d) of 
Regulation S-X.
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    11. Interests in a Fund will not be transferable except with the 
express consent of the General Partner, and then only to a Qualified 
Participant. No sales load or similar fee of any kind will be charged 
in connection with the sale of interests in a Fund.
    12. A Fund may or may not offer investors the right to redeem their 
interests at such times and subject to such conditions as are set forth 
in the governing documents of the Fund. A General Partner may have the 
right, but not the obligation, to repurchase, cancel, mandatorily 
redeem, cancel or transfer to another Qualified Participant the 
interest of (i) an Eligible Employee who ceases to be an employee, 
officer, director or current consultant of any Point72 Entity for any 
reason or (ii) any Eligible Family Member of any person described in 
clause (i). The governing documents for each Fund will describe, if 
applicable, the amount that an investor would receive upon repurchase, 
cancellation, redemption or transfer of its interest.
    13. The Initial Partnership currently invests, and a Future Fund 
may invest in Subsidiary Funds. The Initial Partnership and a Future 
Fund may also in the future invest in one or more pooled investment 
vehicles (including private funds relying on sections 3(c)(1) and 
3(c)(7) under the Act and funds relying on section 3(c)(5) under the 
Act) managed by third parties (each a ``Third Party Underlying Fund,'' 
and together with the Subsidiary Funds, the ``Underlying Funds'').\8\ 
One Fund may also invest in another Fund in a ``master-feeder'' or 
similar structure.\9\ A Fund may also be operated as a parallel

[[Page 52526]]

fund making investments on a side-by-side basis with Underlying Funds.
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    \8\ Applicants are not requesting any exemption from any 
provision of the Act or any rule thereunder that may govern a Fund's 
eligibility to invest in an Underlying Fund relying on section 
3(c)(1) or 3(c)(7) of the Act or an Underlying Fund's status under 
the Act.
    \9\ For example, a Fund established under non-U.S. law may be 
organized primarily for non-U.S. Eligible Employees that would 
invest in a Fund established under U.S. law primarily with U.S. 
resident Eligible Employees in order to more efficiently address 
U.S. or non-U.S. tax issues.
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    14. A Fund may co-invest in a portfolio company (or a pooled 
investment vehicle) with a Point72 Entity or with an investment fund or 
separate account organized primarily for the benefit of investors who 
are not affiliated with Point72 (``Third Party Investors) and over 
which a Point72 Entity exercises investment discretion or which is 
sponsored by a Point72 Entity (a ``Point72 Third Party Fund''). Co-
investments with a Point72 Entity or with a Point72 Third Party Fund in 
a transaction in which Point72's investment was made pursuant to a 
contractual obligation to a Point72 Third Party Fund will not be 
subject to Condition 3 below. All other side-by-side investments held 
by Point72 entities will be subject to Condition 3.
    15. If Point72 makes loans to a Fund, the lender will be entitled 
to receive interest, provided that the interest rate will be no less 
favorable to the borrower than the rate obtainable on an arm's length 
basis. The possibility of any such borrowings, as well as the terms 
thereof, would be disclosed to Qualified Participants prior to their 
investment in a Fund. Any indebtedness of the Fund will be the debt of 
the Fund and without recourse to the investors. A Fund will not borrow 
from any person if the borrowing would cause any person not named in 
section 2(a)(13) of the Act to own securities of the Fund (other than 
short-term paper). A Fund will not lend any funds to a Point72 Entity.
    16. A Fund will not acquire any security issued by a registered 
investment company if immediately after such acquisition such 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 that the Commission shall 
exempt employees' securities companies from the provisions of the Act 
if and to the extent that such 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 specified provisions of the Act shall 
be applicable to such company, and to other persons in their 
transactions and relations with such company, as though such company 
were registered under the Act, if the Commission deems it necessary and 
appropriate in the public interest or for the protection of investors. 
Applicants submit that it would be appropriate in the public interest 
and consistent with the protection of investors and the purposes fairly 
intended by the policies and provisions of the Act for the Commission 
to issue an order under sections 6(b) and 6(e) of the Act exempting the 
Funds from all provisions of the Act and the rules and regulations 
thereunder, except sections 9, 17, 30, and 36 through 53 of the Act, 
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, and rule 38a-1 under the Act, Applicants request 
a limited exemption as set forth in the application.
    3. Section 17(a) of the Act generally prohibits any affiliated 
person of a registered investment company, or any affiliated person of 
such a person, acting as principal, from knowingly selling or 
purchasing any security or other property to or from the investment 
company. Applicants request an exemption from section 17(a) to the 
extent necessary to (a) permit a Point72 Entity or a Point72 Third 
Party Fund (or any affiliated person of such Point72 Entity or Point72 
Third Party Fund), or any affiliated person of a Fund (or affiliated 
persons of such persons), acting as principal, to engage in any 
transaction directly or indirectly with any Fund or any company 
controlled by such Fund; and (b) to permit a Fund to invest or engage 
in any transaction with any Point72 Entity, acting as principal, (i) in 
which such Fund, any company controlled by such Fund or any Point72 
Entity or any Point72 Third Party Fund has invested or will invest, or 
(ii) with which such Fund, any company controlled by such Fund or any 
Point72 Entity or Point72 Third Party Fund is or will become otherwise 
affiliated; and (c) permit a Third Party Investor, acting as a 
principal, to engage in any transaction directly or indirectly with a 
Fund or any company controlled by such Fund. The transactions to which 
any Fund is a party will be effected only after a determination by the 
General Partner that the requirements of Conditions 1, 2 and 6 (set 
forth below) have been satisfied. Applicants, on behalf of the Funds, 
represent that any transactions otherwise subject to section 17(a) of 
the Act, for which exemptive relief has not been requested, would 
require approval of the Commission.
    4. Applicants submit that an exemption from section 17(a) is 
consistent with the policy of each Fund and the protection of 
investors. Applicants state that the investors in each Fund will have 
been fully informed of the possible extent of such Fund's dealings with 
Point72 and of the potential conflicts of interest that may exist. 
Applicants also state that, as professionals employed in the investment 
management business, or in administrative, financial, accounting, 
legal, sales, marketing, risk management or operational activities 
related thereto, the investors will be able to understand and evaluate 
the attendant risks. Applicants assert that the community of interest 
among the investors in each Fund, on the one hand, and Point72, on the 
other hand, is the best insurance against any risk of abuse. Applicants 
acknowledge that the requested relief will not extend to any 
transactions between a Fund and an Unaffiliated Subadviser or an 
affiliated person of the Unaffiliated Subadviser, or between a Fund and 
any person who is not an employee, officer or director of Point72 or is 
an entity outside of Point72 and is an affiliated person of the Fund as 
defined in section 2(a)(3)(E) of the Act (``Advisory Person'') or any 
affiliated person of such person.
    5. Section 17(d) of the Act and rule 17d-1 thereunder prohibit any 
affiliated person or principal underwriter of a registered investment 
company, or any affiliated person of such a person or principal 
underwriter, acting as principal, from participating in any joint 
arrangement with the company unless authorized by the Commission. 
Applicants request an exemption from section 17(d) and rule 17d-1 to 
the extent necessary to permit affiliated persons of each Fund, or 
affiliated persons of any of such persons, to participate in, or effect 
any transaction in connection with, any joint enterprise

[[Page 52527]]

or other joint arrangement or profit-sharing plan in which such Fund or 
a company controlled by such Fund is a participant. The exemption would 
permit, among other things, co-investments by each Fund, Point72 Third 
Party Fund and individual members or employees, officers, directors or 
consultants of Point72 making their own individual investment decisions 
apart from Point72. Applicants acknowledge that the requested relief 
will not extend to any transaction in which an Unaffiliated Subadviser 
or an Advisory Person or an affiliated person of either has an 
interest.
    6. Applicants assert that compliance with section 17(d) would 
prevent each Fund from achieving a principal purpose, which is to 
provide a vehicle for Eligible Employees (and other permitted 
investors) to co-invest with Point72 or, to the extent permitted by the 
terms of the Fund, with other employees, officers, directors or 
consultants of Point72 or Point72 Entities or with a Point72 Third 
Party Fund. Applicants further contend that compliance with section 
17(d) would cause a Fund to forego investment opportunities simply 
because an investor in such Fund or other affiliated person of such 
Fund also had, or contemplated making, a similar investment. Applicants 
submit that it is likely that suitable investments will be brought to 
the attention of a Fund because of its affiliation with Point72's large 
capital resources and investment management experience, and 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 those the 
Fund would independently be able to provide. Applicants contend that, 
as a result, a Fund's access to such opportunities may have to be 
through co-investment 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. In addition, Applicants represent 
that any transactions otherwise subject to section 17(d) of the Act and 
rule 17d-1 thereunder, for which exemptive relief has not been 
requested, would require approval by the Commission.
    7. Co-investments with a Point72 Entity or with a Point72 Third 
Party Fund in a transaction in which Point72's investment was made 
pursuant to a contractual obligation to a Point72 Third Party Fund will 
not be subject to Condition 3 below. Applicants believe that the 
interests of the Eligible Employees participating in a Fund will be 
adequately protected in such situations because Point72 is likely to 
invest a portion of its own capital in Point72 Third Party Fund 
investments, either through such Point72 Third Party Fund or on a side-
by-side basis (which Point72 investments will be subject to 
substantially the same terms as those applicable to such Point72 Third 
Party Fund, except as otherwise disclosed in the governing documents of 
the relevant Fund). Applicants assert that if Condition 3 were to apply 
to Point72's investment in these situations, Point72 Third Party Fund 
would be indirectly burdened by the requirements of Condition 3. 
Applicants further assert that the relationship of a Fund to a Point72 
Third Party Fund is fundamentally different from such Fund's 
relationship to Point72. Applicants contend that the focus of, and the 
rationale for, the protections contained in the requested relief are to 
protect the Funds from any overreaching by Point72 in the employer/
employee context, whereas the same concerns are not present with 
respect to the Funds vis-[agrave]-vis the investors in a Point72 Third 
Party Fund.
    8. Section 17(e) of the Act and rule 17e-1 thereunder limit the 
compensation an affiliated person may receive when acting as agent or 
broker for a registered investment company. Applicants request an 
exemption from section 17(e) to permit a Point72 Entity (including the 
General Partner) that acts as an 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 are deemed ``usual and customary.'' 
Applicants state that for purposes of the application, fees or other 
compensation that are charged or received by a Point72 Entity will be 
deemed to be ``usual and customary'' only if (i) the Fund is purchasing 
or selling securities alongside other unaffiliated third parties, 
Point72 Third Party Funds or Third Party Investors who are also 
similarly purchasing or selling securities, (ii) the fees or other 
compensation being charged to the Fund are also being charged to the 
unaffiliated third parties, Point72 Third Party Funds or Third Party 
Investors, and (iii) 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, 
Point72 Third Party Funds or Third Party Investors. Applicants state 
that compliance with section 17(e) would prevent a Fund from 
participating in a transaction in which Point72, for other business 
reasons, does not wish to appear as if the Fund is being treated in a 
more favorable manner (by being charged lower fees) than other third 
parties also participating in the transaction. Applicants assert that 
the concerns of overreaching and abuse that section 17(e) and rule 17e-
1 were designed to prevent are alleviated by the conditions that ensure 
that (i) the fees or other compensation paid by a Fund to a Point72 
Entity are those negotiated at arm's length with unaffiliated third 
parties and (ii) the unaffiliated third parties have as great or 
greater interest as the Fund in the transactions as a whole.
    9. Rule 17e-1(b) under the Act requires that a majority of 
directors who are not ``interested persons'' (as defined in section 
2(a)(19) of the Act) take actions and make approvals regarding 
commissions, fees, or other remuneration. Rule 17e-1(c) under the Act 
requires each 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(b) to the extent necessary to permit each Fund to comply 
with rule 17e-1(b) without the necessity of having a majority of the 
directors of the Fund who are not ``interested persons'' take such 
actions and make such approvals as are set forth in rule 17(e)-1(b). 
Applicants note that in the event that all the directors of the General 
Partner or other governing body of the General Partner will be 
affiliated persons, a Fund could not comply with rule 17(e)-1(b) 
without the relief requested. Applicants represent that in such an 
event, the Fund will comply with rule 17e-1(b) by having a majority of 
the directors (or members of a comparable body) of the Fund or its 
General Partner take such actions and make such approvals as are set 
forth in rule 17e-1(b). Applicants state that each Fund will otherwise 
comply with all other requirements of rule 17e-1(b). Applicants further 
request an exemption from rule 17(e)-1(c) to the extent necessary to 
permit each Fund to comply with rule 17e-1 without the necessity of 
having a majority of the directors of the Fund be ``disinterested 
persons'' as set forth in rule 17e-1(c). Applicants note that in the 
event that all the directors of the General Partner will be affiliated 
persons, a Fund could not comply with rule 17e-1 without the relief 
requested. Applicants represent

[[Page 52528]]

that each Fund will otherwise comply with all other requirements of 
rule 17e-1(c).
    10. Section 17(f) of the Act provides that the securities and 
similar investments of a registered management investment company must 
be placed in the custody of a bank, a member of a national securities 
exchange or the company itself in accordance with Commission rules. 
Rule 17f-2 under the Act specifies the requirements that must be 
satisfied for a registered management investment company to act as a 
custodian of its own investments. Applicants request relief 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 General Partner or the Investment Adviser for 
purposes of paragraph (b) of the rule; (b) for purposes of paragraph 
(d) of the rule, (i) employees of Point72 or its affiliates (including 
the General Partner) will be deemed to be employees of the Funds, (ii) 
officers or managers of the General Partner of a Fund will be deemed to 
be officers of the Fund and (iii) the General Partner of a Fund or its 
board of directors will be deemed to be the board of directors of the 
Fund; and (c) in place of the verification procedure under rule 17f-
2(f), verification will be effected quarterly by two employees of the 
General Partner who are also employees of Point72 responsible for the 
administrative, legal and/or compliance functions for funds managed or 
sponsored by Point72 and who have specific knowledge of custody 
requirements, policies and procedures of the Funds. Applicants expect 
that, with respect to certain Funds, many of their investments will be 
evidenced only by partnership agreements, participation agreements or 
similar documents, rather than by negotiable certificates that could be 
misappropriated. Applicants assert that for such a Fund, these 
instruments are most suitably kept in the files of the General Partner 
or its Investment Adviser, where they can be referred to as necessary. 
Applicants represent that they will comply with all other provisions of 
rule 17f-2, including the recordkeeping requirements of paragraph (e).
    11. Section 17(g) of the Act and rule 17g-1 thereunder 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'' of a registered investment company take certain actions and 
give certain approvals relating to fidelity bonding. Among other 
things, the rule also requires that the board of directors of an 
investment company relying on the rule satisfy the fund governance 
standards defined in rule 0-1(a)(7). Applicants request an exemption 
from rule 17g-1 to the extent necessary to permit a Fund to comply with 
rule 17g-1 by having the General Partner of the Fund take such actions 
and make such approvals as are set forth in rule 17g-1. Applicants 
state that in the event all the directors of the General Partner or 
other governing body of the General Partner will be affiliated persons, 
a Fund could not comply with rule 17g-1 without the requested relief. 
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 from the requirements of rule 17g-1(j)(3). 
Applicants contend that the filing requirements are burdensome and 
unnecessary as applied to the Funds and represent that the General 
Partner of each Fund will designate a person to maintain the records 
otherwise required to be filed with the Commission under rule 17g-1(g). 
Applicants further contend that the notices otherwise required to be 
given to the board of directors will be unnecessary as the Funds 
typically will not have boards of directors. Applicants represent that 
each Fund will comply with all other requirements of rule 17g-1.
    12. Section 17(j) of the Act and rule 17j-1 require that every 
registered investment company adopt a written code of ethics that 
contains provisions reasonably necessary to prevent ``access persons'' 
from violating the anti-fraud provisions of the rule. Under rule 17j-1, 
the investment company's access persons must report to the investment 
company with respect to transactions in any security in which the 
access person has, or by reason of the transaction acquires, any direct 
or indirect beneficial ownership in such security. Applicants request 
an exemption from section 17(j) and the provisions of rule 17j-1 
(except for the anti-fraud provisions of rule 17j-1(b)) because they 
assert that these requirements are burdensome and unnecessary as 
applied to the Funds. The relief requested will extend only to entities 
within Point72 and is not requested with respect to any Unaffiliated 
Subadviser or Advisory Person.
    13. Sections 30(a), (b) and (e) of the Act and the rules thereunder 
generally require 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 investors in such Fund. Applicants request relief 
under sections 30(a), (b) and (e) to the extent necessary to permit 
each Fund to report annually to its investors in the manner described 
in the application. Section 30(h) of the Act requires that every 
officer, director, member of an advisory board, investment adviser or 
affiliated person of an investment adviser of a closed-end investment 
company be subject to the same duties and liabilities as those imposed 
upon similar classes of persons under section 16(a) of the Exchange 
Act. Applicants request an exemption from section 30(h) of the Act to 
the extent necessary to exempt the General Partner of each Fund, 
directors and officers of the General Partner and any other persons who 
may be deemed members of an advisory board or investment adviser (and 
affiliated persons thereof) of such Fund from filing Forms 3, 4, and 5 
with respect to their ownership of interests in such Fund under section 
16 of the Exchange Act. Applicants assert that, because there will be 
no trading market and the transfers of interests are severely 
restricted, these filings are unnecessary for the protection of 
investors and burdensome to those required to make them.
    14. Rule 38a-1 requires registered investment companies to adopt, 
implement and periodically review written policies reasonably designed 
to prevent violation of the federal securities laws and to appoint a 
chief compliance officer. Each Fund will comply will rule 38a-1(a), (c) 
and (d), except that: (i) To the extent the Fund does not have a board 
of directors, the board of directors or other governing body of the 
General Partner will fulfill the responsibilities assigned to the 
Fund's board of directors under the rule; (ii) to the extent the board 
of directors or other governing body of the General Partner does not 
have any disinterested members, approval by a majority of the 
disinterested board members required by rule 38a-1 will not be 
obtained; and (iii) to the extent the board of directors or other 
governing body of the General Partner does not have any independent 
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

[[Page 52529]]

meet with the board of directors or other governing body of the General 
Partner as constituted. Applicants represent that each Fund has adopted 
written policies and procedures reasonably designed to prevent 
violations of the terms and conditions of the application, has 
appointed a chief compliance officer and is otherwise in compliance 
with the terms and conditions of the application.

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) of the Act and rule 17d-1 thereunder to which a Fund 
is a party (the ``Section 17 Transactions'') will be effected only if 
the General Partner determines that: (a) The terms of the Section 17 
Transaction, including the consideration to be paid or received, are 
fair and reasonable to the Fund and the investors and do not involve 
overreaching of such Fund or its investors on the part of any person 
concerned; and (b) the Section 17 Transaction is consistent with the 
interests of the Fund and the investors, such Fund's organizational 
documents and such Fund's reports to its investors. In addition, the 
General Partner will record and preserve a description of all Section 
17 Transactions, the General Partner's findings, the information or 
materials upon which the General Partner's findings are based and the 
basis for such findings. All such records will be maintained for the 
life of the Fund and at least six years thereafter, and will be subject 
to examination by the Commission and its staff.\10\
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    \10\ Each Fund will preserve the accounts, books and other 
documents required to be maintained in an easily accessible place 
for the first two years.
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    2. The General Partner will adopt, and periodically review and 
update, procedures designed to ensure that reasonable inquiry is made, 
prior to the consummation of any Section 17 Transaction, with respect 
to the possible involvement in the transaction of any affiliated person 
or promoter of or principal underwriter for such Fund, or any 
affiliated person of such a person, promoter or principal underwriter.
    3. The General Partner will not cause the funds of any Fund to be 
invested in any investment in which a ``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 the 
Fund and a Co-Investor are participants, unless prior to such 
investment any such Co-Investor agrees, prior to disposing of all or 
part of its investment, to (a) give the General Partner sufficient, but 
not less than one day's, notice of its intent to dispose of its 
investment; and (b) refrain from disposing of its investment unless the 
Fund has the opportunity to dispose of the Fund's investment prior to 
or concurrently with, on the same terms as, and on a pro rata basis 
with, the Co-Investor. The term ``Co-Investor'' with respect to any 
Fund means any person who is: (a) An ``affiliated person'' (as defined 
in section 2(a)(3) of the Act) of the Fund (other than a Point72 Third 
Party Fund); (b) Point72 (except when a Point72 Entity co-invests with 
a Fund and a Point72 Third Party Fund pursuant to a contractual 
obligation to the Point72 Third Party Fund); (c) an officer or director 
of a Point72 Entity; or (d) an entity (other than a Point72 Third Party 
Fund) in which Point72 acts as a general partner or has a similar 
capacity to control the sale or other disposition of the entity's 
securities. The restrictions contained in this condition, however, 
shall not be deemed to limit or prevent the disposition of an 
investment by a Co-Investor: (a) To its direct or indirect wholly-owned 
subsidiary, to any company (a ``parent'') of which the Co-Investor is a 
direct or indirect wholly-owned subsidiary or to a direct or indirect 
wholly-owned subsidiary of its parent; (b) to immediate family members 
of the Co-Investor, including step or adoptive relationships, or a 
trust or other investment vehicle established for any Co-Investor or 
any such family member; or (c) when the investment is comprised of 
securities that are (i) listed on a national securities exchange 
registered under section 6 of the Exchange Act; (ii) NMS stocks, 
pursuant to section 11A(a)(2) of the Exchange Act and rule 600(b) of 
Regulation NMS thereunder; (iii) government securities as defined in 
section 2(a)(16) of the Act; (iv) ``Eligible Securities'' as defined in 
rule 2a-7 under the Act, or (v) listed or traded on any foreign 
securities exchange or board of trade that satisfies regulatory 
requirements under the law of the jurisdiction in which such foreign 
securities exchange or board of trade is organized similar to those 
that apply to a national securities exchange or a national market 
system for securities.
    4. Each Fund and its General Partner 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 investors in such Fund, and each annual report of such Fund 
required to be sent to such investors, and agree that all such records 
will be subject to examination by the Commission and its staff.\11\
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    \11\ Each Fund will preserve the accounts, books and other 
documents required to be maintained in an easily accessible place 
for the first two years.
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    5. Within 120 days after the end of the fiscal year of each Fund, 
or as soon as practicable thereafter, the General Partner of each Fund 
will send to each investor in such Fund who had an interest in any 
capital account of the Fund, at any time during the fiscal year then 
ended, Fund financial statements audited by the Fund's independent 
accountants, except in the case of a Fund formed to make a single 
portfolio investment. In such cases, financial statements will be 
unaudited, but each investor will receive financial statements of the 
single portfolio investment audited by such entity's independent 
accountants. At the end of each fiscal year and at other times as 
necessary in accordance with customary practice, the General Partner 
will make a valuation or cause a valuation to be made of all of the 
assets of the Fund as of the fiscal year end. In addition, as soon as 
practicable after the end of each tax year of a Fund, the General 
Partner of such Fund will send a report to each person who was an 
investor 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 investor of his, her or its U.S. federal and state 
income tax returns and a report of the investment activities of the 
Fund during that fiscal year.
    6. If a Fund makes purchases or sales from or to an entity 
affiliated with the Fund by reason of an officer, director or employee 
of Point72 (a) serving as an officer, director, general partner or 
investment adviser of the entity, or (b) having a 5% or more investment 
in the entity, such individual will not participate in the Fund's 
determination of whether or not to effect the purchase or sale.

    For the Commission, by the Division of Investment Management, 
under delegated authority.
J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2021-20323 Filed 9-20-21; 8:45 am]
BILLING CODE 8011-01-P