Notice2021-13663
Lord Abbett Floating Rate High Income Fund, et al.
Primary source
Metadata and text below are from the Federal Register, a public-domain U.S. government work. Always verify the official published version before relying on it for any legal matter.
Published
June 28, 2021
Issuing agencies
Securities and Exchange Commission
Full Text
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<title>Federal Register, Volume 86 Issue 121 (Monday, June 28, 2021)</title>
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[Federal Register Volume 86, Number 121 (Monday, June 28, 2021)]
[Notices]
[Pages 34107-34109]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2021-13663]
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SECURITIES AND EXCHANGE COMMISSION
[Investment Company Act Release No. 34308; File No. 812-15097]
Lord Abbett Floating Rate High Income Fund, et al.
June 22, 2021.
AGENCY: Securities and Exchange Commission.
ACTION: Notice.
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Notice of application for an order under sections 6(c) and 23(c)(3)
of the Investment Company Act of 1940 (the ``Act'') for an exemption
from rule 23c-3 under the Act.
SUMMARY OF APPLICATION: Applicants request an order under sections 6(c)
and 23(c)(3) of the Act for an exemption from certain provisions of
rule 23c-3 to permit certain registered closed-end investment companies
to make repurchase offers on a monthly basis.
APPLICANTS: Lord Abbett Floating Rate High Income Fund (the ``Fund''),
Lord Abbett & Co. LLC (the ``Adviser'') and Lord Abbett Distributor LLC
(the ``Distributor'').
FILING DATES: The application was filed on February 21, 2020 and
amended on September 11, 2020 and February 23, 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 <a href="/cdn-cgi/l/email-protection#abf8cec8d9cedfcad9d2d886e4cdcdc2c8ceebd8cec885ccc4dd"><span class="__cf_email__" data-cfemail="70231513021504110209035d3f1616191315300315135e171f06">[email protected]</span></a> 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 July 16, 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
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.
ADDRESSES: The Commission: <a href="/cdn-cgi/l/email-protection#2c7f494f5e49584d5e555f01634a4a454f496c5f494f024b435a"><span class="__cf_email__" data-cfemail="6c3f090f1e09180d1e151f41230a0a050f092c1f090f420b031a">[email protected]</span></a>. Applicants:
Pamela P. Chen, Associate General Counsel, <a href="/cdn-cgi/l/email-protection#0e5e4d464b404e42617c6a4f6c6c6b7a7a206d6163"><span class="__cf_email__" data-cfemail="b1e1f2f9f4fff1fddec3d5f0d3d3d4c5c59fd2dedc">[email protected]</span></a>.
FOR FURTHER INFORMATION CONTACT: Bruce R. MacNeil, Senior Counsel, at
(202) 551-6817 or Kaitlin C. Bottock, Branch Chief, 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 <a href="http://www.sec.gov/search/search.htm">http://www.sec.gov/search/search.htm</a> or by calling (202) 551-8090.
Applicants' Representations
1. The Fund is a Delaware statutory trust that is registered under
the Act as a non-diversified, closed-end management investment company
that will be operated as an interval fund. The Adviser is a Delaware
limited liability company and is registered as an investment adviser
under the Investment Advisers Act of 1940. The Adviser serves as
investment adviser to the Fund. The Distributor, a New York limited
liability company and subsidiary of the Adviser, is a registered
broker-dealer and is the Fund's principal underwriter and distributor.
2. Applicants request that any relief granted also apply to any
registered closed-end management investment company that operates as an
interval fund pursuant to rule 23c-3 for which the Adviser or any
entity controlling, controlled by, or under common control with the
Adviser, or any successor in interest to any such entity,\1\ acts as
investment adviser (the ``Future Funds,'' and together with the Fund,
the ``Funds,'' and each, individually, a ``Fund'').\2\
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\1\ A successor in interest is limited to an entity that results
from a reorganization into another jurisdiction or a change in the
type of business organization.
\2\ All entities currently intending to rely on the requested
relief have been named as applicants. Any entity that relies on the
requested order in the future will do so only in accordance with the
terms and conditions of the application.
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[[Page 34108]]
3. The Fund's common shares are not offered or traded in the
secondary market and are not listed on any exchange or quoted on any
quotation medium.
4. Applicants request an order to permit each Fund to offer to
repurchase a portion of its common shares at one-month intervals,
rather than the three, six, or twelve-month intervals specified by rule
23c-3. Each Fund will disclose in its prospectus and annual reports its
fundamental policy to make monthly offers to repurchase a portion of
its common shares at net asset value, less deduction of a repurchase
fee, if any, as permitted by rule 23c-3(b)(1).\3\ The fundamental
policy will be changeable only by a majority vote of the holders of
such Fund's outstanding voting securities. Under the fundamental
policy, the repurchase offer amount will be determined by the board of
trustees of the applicable Fund (``Board'') prior to each repurchase
offer. Each Fund will comply with rule 23c-3(b)(8)'s requirements with
respect to its trustees who are not interested persons of such Fund,
within the meaning of section 2(a)(19) of the Act (``Disinterested
Trustees'') and their legal counsel. Each Fund will make monthly offers
to repurchase not less than 5% of its outstanding shares at the time of
the repurchase request deadline. The repurchase offer amounts for the
then-current monthly period, plus the repurchase offer amounts for the
two monthly periods immediately preceding the then-current monthly
period, will not exceed 25% of the outstanding common shares of the
applicable Fund.
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\3\ Applicants also note that the Fund has exemptive relief that
permits the Fund to issue multiple classes of shares and to impose
asset-based distribution fees and early withdrawal fees. See In the
Matter of Lord Abbett Credit Opportunities Fund, et al., Investment
Company Act Rel. Nos. 33513 (June 19, 2019) (notice) and 33558 (July
16, 2019) (order).
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5. Each Fund's fundamental policies will specify the means to
determine the repurchase request deadline and the maximum number of
days between each repurchase request deadline and the repurchase
pricing date. Each Fund's repurchase pricing date normally will be the
same date as the repurchase request deadline and pricing will be
determined after close of business on that date.
6. Pursuant to rule 23c-3(b)(1), each Fund will repurchase shares
for cash on or before the repurchase payment deadline, which will be no
later than seven calendar days after the repurchase pricing date. The
Fund (and any Future Fund) currently intends to make payment by the
fifth business day or seventh calendar day (whichever period is
shorter) following the repurchase pricing date. Each Fund will make
payment for shares repurchased in the previous month's repurchase offer
at least five business days before sending notification of the next
repurchase offer. The Fund and a Future Fund may deduct a repurchase
fee in an amount not to exceed 2% from the repurchase proceeds payable
to tendering shareholders, in compliance with rule 23c-3(b)(1).
7. Each Fund will provide common shareholders with notification of
each repurchase offer no less than seven days and no more than fourteen
days prior to the repurchase request deadline. The notification will
include all information required by rule 23c-3(b)(4)(i). Each Fund will
file the notification and the Form N-23c-3 with the Commission within
three business days after sending the notification to its respective
common shareholders.
8. Each Fund will not suspend or postpone a repurchase offer except
pursuant to the vote of a majority of its Trustees, including a
majority of its Disinterested Trustees, and only under the limited
circumstances specified in rule 23c-3(b)(3)(i). Each Fund will not
condition a repurchase offer upon tender of any minimum amount of
shares. In addition, each Fund will comply with the pro ration and
other allocation requirements of rule 23c-3(b)(5) if common
shareholders tender more than the repurchase offer amount. Further,
each Fund will permit tenders to be withdrawn or modified at any time
until the repurchase request deadline, but will not permit tenders to
be withdrawn or modified thereafter.
9. From the time a Fund sends its notification to shareholders of
the repurchase offer until the repurchase pricing date, a percentage of
such Fund's assets equal to at least 100% of the repurchase offer
amount will consist of: (a) Assets that can be sold or disposed of in
the ordinary course of business at approximately the price at which
such Fund has valued such investment within a period equal to the
period between the repurchase request deadline and the repurchase
payment deadline; or (b) assets that mature by the next repurchase
payment deadline. In the event the assets of a Fund fail to comply with
this requirement, the Board will cause such Fund to take such action as
it deems appropriate to ensure compliance.
10. In compliance with the asset coverage requirements of section
18 of the Act, any senior security issued by, or other indebtedness of,
a Fund will either mature by the next repurchase pricing date or
provide for such Fund's ability to call, repay or redeem such senior
security or other indebtedness by the next repurchase pricing date,
either in whole or in part, without penalty or premium, as necessary to
permit that Fund to complete the repurchase offer in such amounts
determined by its Board.
11. The Board of each Fund will adopt written procedures to ensure
that such Fund's portfolio assets are sufficiently liquid so that it
can comply with its fundamental policy on repurchases and the liquidity
requirements of rule 23c-3(b)(10)(i). The Board of each Fund will
review the overall composition of the portfolio and make and approve
such changes to the procedures as it deems necessary.
Applicants' Legal Analysis
1. Section 6(c) of the Act provides that the Commission may exempt
any person, security, or transaction, or any class or classes of
persons, securities, or transactions, from any provision of the Act or
rule thereunder, if and to the extent that such exemption is necessary
or appropriate in the public interest and consistent with the
protection of investors and the purposes fairly intended by the policy
and provisions of the Act.
2. Section 23(c) of the Act provides in relevant part that no
registered closed-end investment company shall purchase any securities
of any class of which it is the issuer except: (a) On a securities
exchange or other open market; (b) pursuant to tenders, after
reasonable opportunity to submit tenders given to all holders of
securities of the class to be purchased; or (c) under such other
circumstances as the Commission may permit by rules and regulations or
orders for the protection of investors.
3. Rule 23c-3 under the Act permits a registered closed-end
investment company to make repurchase offers for its common stock at
net asset value at periodic intervals pursuant to a fundamental policy
of the investment company. ``Periodic interval'' is defined in rule
23c-3(a)(1) as an interval of three, six, or twelve months. Rule 23c-
3(b)(4) requires that notification of each repurchase offer be sent to
shareholders no less than 21 calendar days and no more than 42 calendar
days before the repurchase request deadline.
4. Applicants request an order pursuant to sections 6(c) and 23(c)
of the Act exempting them from rule 23c-3(a)(1) to the extent necessary
to permit the Funds to make monthly repurchase offers. Applicants also
request an
[[Page 34109]]
exemption from the notice provisions of rule 23c-3(b)(4) to the extent
necessary to permit each Fund to send notification of an upcoming
repurchase offer to shareholders at least seven days but no more than
fourteen calendar days in advance of the repurchase request deadline.
5. Applicants contend that monthly repurchase offers are in the
public interest and in the common shareholders' interests and
consistent with the policies underlying rule 23c-3. Applicants assert
that monthly repurchase offers will provide investors with more
liquidity than quarterly repurchase offers. Applicants assert that
shareholders will be better able to manage their investments and plan
transactions, because if they decide to forego a repurchase offer, they
will only need to wait one month for the next offer. Applicants also
contend that the portfolio of each Fund will be managed to provide
ample liquidity for monthly repurchase offers.
6. Applicants propose to send notification to shareholders at least
seven days, but no more than fourteen calendar days, in advance of a
repurchase request deadline. Applicants assert that, because each Fund
intends to make payment on the fifth business day or seventh calendar
day (whichever period is shorter) following the repurchase pricing
date, the entire procedure will be completed before the next
notification is sent out to shareholders, thus avoiding any overlap.
Applicants believe that these procedures will eliminate any possibility
of investor confusion. Applicants also state that monthly repurchase
offers will be a fundamental feature of the Funds, and their
prospectuses will provide a clear explanation of the repurchase
program.
7. Applicants submit that for the reasons given above the requested
relief is appropriate in the public interest and is consistent with the
protection of investors and the purposes fairly intended by the policy
and provisions of the Act.
Applicants' Conditions
Applicants agree that any order granting the requested relief shall
be subject to the following conditions:
1. The Fund (and any Future Fund relying on this relief) will make
a repurchase offer pursuant to rule 23c-3(b) for a repurchase offer
amount of not less than 5% in any one-month period. In addition, the
repurchase offer amount for the then-current monthly period, plus the
repurchase offer amounts for the two monthly periods immediately
preceding the then-current monthly period, will not exceed 25% of the
Fund's (or Future Fund's, as applicable) outstanding common shares. The
Fund (and any Future Fund relying on this relief) may repurchase
additional tendered common shares pursuant to rule 23c-3(b)(5) only to
the extent the percentage of additional common shares so repurchased
does not exceed 2% in any three-month period.
2. Payment for repurchased common shares will occur at least five
business days before notification of the next repurchase offer is sent
to common shareholders of the Fund (or any Future Fund relying on this
relief).
For the Commission, by the Division of Investment Management,
under delegated authority.
J. Matthew DesLesDernier,
Assistant Secretary.
[FR Doc. 2021-13663 Filed 6-25-21; 8:45 am]
BILLING CODE 8011-01-P
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