Notice2026-05751
Savvly Fund #3 and Savvly Advisor, LLC; Notice of Application
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
March 25, 2026
Issuing agencies
Securities and Exchange Commission
Full Text
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<title>Federal Register, Volume 91 Issue 57 (Wednesday, March 25, 2026)</title>
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[Federal Register Volume 91, Number 57 (Wednesday, March 25, 2026)]
[Notices]
[Pages 14604-14608]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2026-05751]
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SECURITIES AND EXCHANGE COMMISSION
[Investment Company Act Release No. 36029; 812-16002]
Savvly Fund #3 and Savvly Advisor, LLC; Notice of Application
March 20, 2026.
AGENCY: Securities and Exchange Commission (the ``Commission'').
ACTION: Notice.
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Notice of an Application Under: (i) section 6(c) of the Investment
Company Act of 1940 (the ``Investment Company Act'') for certain
exemptions from sections 18(c) and 18(i) of the Investment Company Act;
and (ii) section 23(c)(3) of the Investment Company Act for an
exemption from section 23(c) of the Investment Company Act.
Summary of Application: Applicants request an order that would permit
a closed-end investment company registered under the Investment Company
Act (a ``CEF'') to issue multiple series of preferred shares, each
entitled to different distribution
[[Page 14605]]
amounts, and to repurchase them under their terms either upon early
withdrawal or upon a shareholder reaching a certain age in order to
provide augmented returns to shareholders who remain invested in the
CEF until a certain age.
Applicants: Savvly Fund #3 (the ``Initial Fund'') and Savvly Advisor,
LLC (the ``Adviser,'' and collectively with the Initial Fund, the
``Applicants'').
Filing Dates: The application was filed on March 6, 2026 and amended
on March 6, 2026.
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 on any application by emailing
the Commission's Secretary at <a href="/cdn-cgi/l/email-protection#4211272130273623303b316f0d24242b2127023127216c252d34"><span class="__cf_email__" data-cfemail="4417212736213025363d37690b22222d2721043721276a232b32">[email protected]</span></a> and serving
Applicants with a copy of the request by email, if an email address is
listed for the relevant Applicant below, or personally or by mail, if a
physical address is listed for the relevant Applicant below. The email
should include the file number referenced above. Hearing requests
should be received by the Commission by 5:30 p.m., Eastern Time, on
April 14, 2026, and should be accompanied by proof of service on
Applicants, in the form of an affidavit or, for lawyers, a certificate
of service. Pursuant to rule 0-5 under the Investment Company 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 <a href="/cdn-cgi/l/email-protection#7d2e181e0f18091c0f040e50321b1b141e183d0e181e531a120b"><span class="__cf_email__" data-cfemail="7e2d1b1d0c1b0a1f0c070d53311818171d1b3e0d1b1d50191108">[email protected]</span></a>.
ADDRESSES: The Commission: <a href="/cdn-cgi/l/email-protection#2774424455425346555e540a6841414e44426754424409404851"><span class="__cf_email__" data-cfemail="7724121405120316050e045a3811111e14123704121459101801">[email protected]</span></a>. Applicants: Dario
Fusato and Rob Evans, c/o Savvly, Inc., <a href="/cdn-cgi/l/email-protection#86e2e7f4efe9c6f5e7f0f0eaffa8e5e9eb"><span class="__cf_email__" data-cfemail="a4c0c5d6cdcbe4d7c5d2d2c8dd8ac7cbc9">[email protected]</span></a> and
<a href="/cdn-cgi/l/email-protection#d5a7bab795a6b4a3a3b9acfbb6bab8"><span class="__cf_email__" data-cfemail="aad8c5c8ead9cbdcdcc6d384c9c5c7">[email protected]</span></a>.
FOR FURTHER INFORMATION CONTACT: Christopher D. Carlson, Senior
Counsel, or Daniele Marchesani, Assistant Chief Counsel, at (202) 551-
6825 (Division of Investment Management, Chief Counsel's Office).
SUPPLEMENTARY INFORMATION: For Applicants' representations, legal
analysis, and conditions, please refer to Applicants' amended
application, dated March 6, 2026, which may be obtained via the
Commission's website by searching for the file number at the top of
this document, or for an Applicant using the Company name search field,
on the SEC's EDGAR system. The SEC's EDGAR system may be searched at
<a href="https://www.sec.gov/search-filings">https://www.sec.gov/search-filings</a>. You may also call the SEC's Office
of Investor Education and Advocacy at (202) 551-8090.
Applicants' Representations
Applicants
1. The Initial Fund is a Delaware statutory trust that is a CEF and
will register the offering of its shares under the Securities Act of
1933. The Initial Fund pursues its investment objective by investing
substantially all of its assets in exchange-traded funds (``ETFs'')
that seek to track the S&P 500 index (``S&P 500 ETFs''). The Initial
Fund seeks to provide long-term investment results that, before
expenses, correspond generally to the price performance of the S&P 500
index.
2. The Adviser is a Delaware limited liability company and is
controlled by Savvly, Inc., a Delaware corporation (``Savvly''). The
Adviser is registered with the Commission as an investment adviser
under the Investment Advisers Act of 1940 and will serve as investment
adviser for each Fund (as defined below) pursuant to an investment
management agreement.\1\ The Adviser or an affiliate will serve as the
Initial Fund's administrator (the ``Administrator'').
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\1\ Applicants request that the relief also apply to any CEF
that may be organized in the future for which Adviser or any entity
controlling, controlled by or under common control with, the Adviser
or its successors acts as an investment adviser (such entities are
included in the term ``Adviser'') that is continuously offered
(each, a ``Future Fund,'' and together with the Initial Fund, the
``Funds''). Any of the Funds relying on this relief in the future
will do so in compliance with the terms and conditions of the
application. For the purposes of the requested order, ``successor''
is limited to an entity resulting from a reorganization into another
jurisdiction or a change in the type of business organization.
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Applicants' Proposal
3. The Initial Fund would augment investment returns of
shareholders who remain invested in the Initial Fund until a certain
age through a mechanism whereby, for shareholders who die or redeem
their shares early, part of these shareholders' interest (the ``excess
value'') is reallocated to shareholders remaining in the Initial Fund.
Shares of the Initial Fund will only be held by natural persons. Upon
reaching certain ages (i.e., 80, 85, 90, 95) (``the payout ages'') a
shareholder can tender his or her shares for repurchase, thus receiving
the full value of the shares, including excess value accumulated over
the years, minus a payout fee.
4. The Initial Fund will issue common shares and multiple series of
preferred shares, both with certain liquidity and transfer
restrictions. Upon an initial investment, the Initial Fund will issue a
shareholder a number of common shares corresponding to the investment
and 10 preferred shares (referred to as the ``Tracking Shares''). Each
shareholder's shares will be classified into four different investment
units (the ``Units''), per the chart below, one for each of the payout
dates for that shareholder at ages 80, 85, 90 and 95:
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Payout age
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80 85 90 95
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Tracking Shares (number of shares).............. 4 3 2 1
Common Shares (as a percentage of investment)... 40% 30% 20% 10%
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5. The Initial Fund's shares are non-transferrable, except to a
shareholder's estate or beneficiaries upon death of the shareholder,
and will not be listed on an exchange. Prior to a payout date,
shareholders may obtain liquidity for their shares only by ``early
withdrawal'', either voluntarily or upon death. The terms of the
Tracking Shares impose an early withdrawal penalty that includes all of
the gains on a shareholder's investment in the Fund. Upon early
withdrawal, a shareholder receives 75% (plus 1% per year invested up to
100%) of the purchase price of his or her shares (less any sales load)
or the net asset value (the ``NAV'') of their common shares (if less)
and would not receive any value for their Tracking Shares for any Unit
where the shareholder has not yet reached a payout age.\2\
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\2\ The terms of the Tracking Shares also allow a shareholder to
request a partial early withdrawal of a portion of their shares on
comparable terms to a full early withdrawal.
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6. The Initial Fund will allocate amounts it retains as early
withdrawal penalties (the ``excess value''), after
[[Page 14606]]
payment of a reallocation fee to the Adviser, to the remaining
shareholders in the Tracking Shares to enhance their returns upon
reaching the payout ages. The Initial Fund will allocate excess value
to the Tracking Shares according to algorithms designed and owned by
Savvly, which Savvly has licensed to the Administrator (the
``Allocation Formula''). The Allocation Formula uses inputs that
include the age of a shareholder and his or her corresponding
likelihood of death reflected in longevity factors published in
standard U.S. Social Security Administration data (the ``longevity
factors''), the size of the shareholder's investment in the Initial
Fund and the number of years the shareholder has remained invested in
the Initial Fund.
7. The terms of the Tracking Shares will allow a shareholder to
tender shares in the applicable Unit for repurchase by the Initial Fund
on or after the applicable payout date, provided that the shareholder
has held the Unit for at least five years. On or following a payout
date, the shareholder can tender the common shares and Tracking Shares
included in the applicable unit and will be entitled to a distribution
in-kind of S&P 500 ETFs equal in value to the excess value underlying
the Tracking Shares in applicable Unit (the ``repurchase price'') less
the payout expense payable to the Administrator (the ``payout
amount''). The shareholder can receive the payout amount on the payout
date without advance notice or later upon three months' notice to the
Initial Fund.
8. The Initial Fund will pay an annual administrative fee to the
Administrator to compensate it for administrative work associated with
payouts and allocations of excess value (e.g., tracking separate payout
amounts and allocations for each shareholder, identifying when an
shareholder dies and their account becomes subject to early withdrawal,
licensing intellectual property rights from Savvly to use the
Allocation Formula, coordinating in-kind payments and supporting
shareholders in understanding their investment in a Fund). The
administrative fee will be charged as a percentage of the excess value
allocated to the outstanding Tracking Shares. When a shareholder
becomes eligible for a payout for a given Unit, the Tracking Shares
included in that Unit will no longer receive excess value allocations
and will not be charged an administrative fee. In addition to the
annual expenses of the Initial Fund, the Initial Fund will incur: (i) a
reallocation expense payable to the Administrator when excess value is
allocated to Tracking Shares; and (ii) a payout expense payable to the
Administrator based on the value of the Tracking Shares that become
subject to payout.
9. The Initial Fund expects to make cash distributions as necessary
to maintain its tax status as a registered investment company under the
Internal Revenue Code of 1986, as amended. The Tracking Shares will
also be entitled to: (i) cumulative dividends of 0.02% of the
repurchase price of the Tracking Shares annually; and (ii) quarterly or
annual distributions, as and if declared by the Board, calculated at
the same rate as the distributions on the Common Shares, except that
the rate shall be reduced by the administrative fee. When allocating
those distributions between common shares and Tracking Shares, the
calculation will generally be based on the respective values of the
common shares and the Tracking Shares.
10. Each Fund will comply with rule 18f-3(c)(1) under the
Investment Company Act and allocate income, realized gains and losses,
unrealized appreciation and depreciation, and expenses pursuant to a
method approved by the Fund's board of directors or trustees (the
``Board'') as permitted under rule 18f-3(c)(1)(v) under the Investment
Company Act, as if the Fund were a registered open-end management
investment company offering multiple classes of voting stock.\3\ For
this purpose, the Fund will treat the common shares and each series of
Tracking Shares as a separate class, provided that the related
calculation of ``annualized rates of return'' will exclude any
allocation of excess value during the relevant period.
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\3\ See condition 2 of the application, reproduced below in the
section ``Applicants' Conditions.''
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11. Each Fund will comply with rule 18f-3(d) under the Investment
Company Act as if a Fund were a registered open-end management
investment company offering multiple classes of voting stock.\4\ Rule
18f-3(d) generally requires that a fund adopt a written plan specifying
all of the differences among classes, including methods for allocating
expenses relating to those differences, and that the fund's board,
including a majority of the independent directors, find that the plan
is in the best interests of each class individually and the fund as a
whole. For purposes of complying with rule 18f-3(d) under the
Investment Company Act, a Fund will treat the common shares and each
individual series of Tracking Shares as a separate class.
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\4\ See condition 4 of the application, reproduced below in the
section ``Applicants' Conditions.''
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12. The Tracking Shares will vote on all matters required by the
Investment Company Act and will vote together as a class, provided that
if a shareholder vote or consent would adversely affect a particular
series adversely compared to other series, then that series would get a
separate series vote on that shareholder action. The voting rights of
each Tracking Share when voting exclusively with other Tracking Shares
are based on the deferred repurchase price of that Tracking Share out
of the total of that calculation for all outstanding Tracking Shares on
the applicable record date. The Tracking Shares will vote together with
the common shares on all other matters, with the common shares having
one vote per share and the Tracking Shares one vote for each amount
equivalent to the NAV of the common shares. Specifically, when voting
together with the common shares, a Tracking Share will have votes equal
to the repurchase price of the Tracking Share divided by the NAV of the
common shares on the record date.
13. The assets of the Initial Fund will fluctuate over time as
follows. The Initial Fund will sell Units of common shares and Tracking
Shares to new shareholders (as well as additional common shares to
shareholders who make additional investments) and invest the proceeds
of these sales in S&P 500 ETFs. The value of the common shares will
increase and decline with the value of those S&P 500 ETFs. In addition,
the Initial Fund will retain early withdrawal penalties from exiting
shareholders, allocating it to the remaining shareholders in the form
of excess value. The Initial Fund will keep such excess value invested
in S&P 500 ETFs. The Tracking Shares will track the excess value, which
will fluctuate as the corresponding S&P 500 ETFs change in value and as
the Initial Fund retains additional withdrawing penalties.
14. The assets of the Initial Fund and the total excess value will
decline when shareholders receive payouts in amounts based on the value
of the common shares and Tracking Shares surrendered for that payout.
15. The Tracking Shares held by each shareholder may differ from
those held by other shareholders because the early withdrawal penalty
calculation, payout dates and allocation rates of the Tracking Shares
vary with the ages, dates of investment and amounts invested by the
shareholders (including the value of the shareholder's Tracking
Shares). As a result, the Tracking Shares will be issued in multiple
series based on those differences.
[[Page 14607]]
16. A Future Fund will use the same method for allocating fees
between the common shares and Tracking Shares and the same method of
allocating excess value as the Initial Fund, although the cumulative
dividend rate on the Tracking Shares, payout ages, number of units,
specific amounts of fees and expenses and when they are paid, and
underlying assets of a Future Fund may differ from those of the Initial
Fund. For example, a Future Fund could (i) use more or fewer payout
ages than the Initial Fund, which would alter the number of Units, (ii)
impose a different dividend rate and different fee amounts and timing
than the Initial Fund, (iii) modify the percentages for the early
withdrawal penalty calculation, and (iv) invest in ETFs or direct
indexing tied to a different stock or bond market index than the S&P
500 index used by the Initial Fund.
Applicants' Legal Analysis
1. The requested order will allow the Initial Fund to: (i) issue
Tracking Shares with terms that differ from traditional series of
preferred stock notwithstanding section 18(c) of the Investment Company
Act; (ii) allocate voting rights to the Tracking Shares based on
allocations of excess value, as discussed above, which may not be
consistent with section 18(i); and (iii) repurchase common shares and
Tracking Shares in connection with early withdrawals and payouts
notwithstanding section 23(c) of the Investment Company Act.
Section 18(c) of the Investment Company Act
2. Section 18(c) of the Investment Company Act generally provides
that a CEF may have only one class of senior security representing
indebtedness and only one class of senior security that is stock.
Section 18(c) permits a CEF to issue debt or preferred stock ``in one
or more series,'' as long as no series has ``a preference or priority
over any other series upon the distribution of the [CEF's] assets . . .
or in respect of the payment of interest or dividends.''
3. The Tracking Shares of a series held by one shareholder will
have a ``preference or priority'' over other series by virtue of the
distribution of excess value according to the Allocation Formula.
Tracking Shares will have differing excess value allocation rates based
on the age of the shareholder and the date of investment among other
factors and Tracking Shares with more allocated excess value and a
higher repurchase price will have a higher value than Tracking Shares
with less in allocated excess value. Because the Initial Fund will
issue Tracking Shares in multiple series to accommodate variations in
allocations of excess value according to the Allocation Formula, and
some series of Tracking Shares will have a preference or priority over
other series as result, the Applicants request relief from section
18(c).
4. The Applicants believe that a Fund's capital structure and
Allocation Formula that determine payouts based on the age of the
shareholders and permit penalties upon early withdrawal, voluntarily
and upon death of the shareholder, leading to additional allocations to
the remaining shareholders, are fair to shareholders. Applicants
represent that potential investors in a Fund will be fully informed
about the trade-off whereby an investor gives any growth in their
investment in the Fund and a portion of their initial investment
(depending on how long they remain in the Fund) if they withdraw early
in exchange for the possibility of augmented returns due to allocations
of excess value to help mitigate an investor's risk of outliving their
savings.
5. The Allocation Formula is designed to apportion the excess value
retained in the applicable Fund when shareholders withdraw early to the
other remaining shareholders. The Applicants maintain that the
Allocation Formula is fair because it allocates excess value to the
Tracking Shares based on objective criteria that apply equally to all
shareholders, such as the age of the shareholder and how long the
shareholder is expected to live as reflected in published longevity
factors, when and how much they and others have invested in a Fund, and
the longevity factors for other shareholders in a Fund.
6. Applicants will disclose the terms of each Fund, the Tracking
Shares and the common shares to shareholders so they will understand
the rules that will govern their investment and that the returns that
they earn may vary from those that other shareholders earn based on
elements outside their control, such as when other shareholders
invested in a Fund, the ages of those other shareholders, the amounts
they have invested and the dates of any early withdrawals by other
investors. Applicants will also disclose to investors that if they were
the same age and invested at the same time as another shareholder and
invested the same amount, they would earn the same amount if they both
lived to their last payout age, and that any shareholder will be
entitled to a lower rate of allocations than other shareholders who
have a higher mortality risk and vice versa.
7. Applicants represent that other than the Tracking Shares, the
Funds will not issue any other kind of ``senior security'' as defined
in section 18(g) of the Investment Company Act or enter into any
derivatives transactions (as defined in rule 18f-4 under the Investment
Company Act).
Section 18(i) of the Investment Company Act
8. Section 18(i), in relevant part, requires that ``every share of
stock . . . issued by a registered management company . . . shall be
voting stock and have equal voting rights with every other outstanding
voting stock,'' except to the extent preferred stock has additional
voting rights that are specified in section 18(a) or as otherwise
required by law.
9. The Applicants believe that the voting rights of the holders of
Tracking Shares align the voting rights with each shareholder's
economic interest in the Fund and with the voting rights of the holders
of the common shares. Where the Investment Company Act requires a
separate vote of the Tracking Shares, the number of votes per share
will be calculated by dividing the total value of the Tracking Shares
on the applicable record date (based on the repurchase price) divided
by the NAV of the common shares on that record date, so that holders of
the Tracking Shares have a number of votes per share consistent with
their economic interest in the Tracking Shares.
Section 23(c) of the Investment Company Act
10. Section 23(c) of the Investment Company Act prohibits a CEF
from ``purchas[ing] any securities of any class of which it is the
issuer'' except under specified circumstances. Under the terms of the
Tracking Shares, as described in the application, a Fund will conduct
repurchases that result in payments to a shareholder or the
shareholder's estate or beneficiaries and a cancellation of Tracking
Shares and/or common shares. Those transactions include early
withdrawal payments and payouts after a shareholder requests a
withdrawal or reaches a payout date and provides notice to the Fund.
11. The Applicants believe that a Fund's repurchases of Tracking
Shares and common shares pursuant to early withdrawals and payout
transactions will be made in a manner or on a basis that does not
unfairly discriminate against any holders of the class or classes of
securities to be purchased and represent that, if an exemption from
[[Page 14608]]
section 23(c) of the Investment Company Act is granted, those
repurchases will be made subject to the representations and conditions
contained in the application.
Applicants' Conditions
Applicants agree that any order of the Commission granting the
requested relief will be subject to the following conditions:
1. The expenses that are described in the application as being
borne differently by the common shares or series of Tracking Shares are
the only expenses that will be borne differently by the common shares
or series of Tracking Shares of a Fund. Other than as stated in the
application, the common shares and series of Tracking Shares, treated
as separate classes for purposes of this condition, may pay a different
share of expenses other than shareholder services or distribution
expenses, not including advisory or custodial fees or other expenses
related to the management of the company's assets (collectively,
``other class expenses''), if other class expenses are actually
incurred in a different amount by the common shares or series of
Tracking Shares, or if the holders of common shares or series of
Tracking Shares receive services of a different kind or to a different
degree than other classes.
2. A Fund will comply with rule 18f-3(c)(1) under the Investment
Company Act as follows: income, realized gains and losses, unrealized
appreciation and depreciation, and expenses not allocated as described
in the application or according to condition 1 shall be allocated based
on a method approved by the Board pursuant to rule 18f-3(c)(1)(v) under
the Investment Company Act, as if a Fund were a registered open-end
management investment company offering multiple classes of voting
stock. For this purpose, a Fund will treat the common shares and each
individual series of Tracking Shares as a separate class, provided that
the related calculation of ``annualized rates of return'' will exclude
any allocation of excess value during the relevant period.
3. With respect to matters submitted for a shareholder vote, (a)
the Tracking Shares: (i) shall have exclusive voting rights on any
matter submitted to shareholders that relates solely to the Tracking
Shares; and (ii) at the series level, shall have separate voting rights
on any matter to be voted on exclusively by holders of Tracking Shares
in which the interests of more than one series of Tracking Shares would
be adversely affected compared to all other series; (b) the common
shares and Tracking Shares, each treated as a separate class, shall
have separate voting rights on any matter submitted to shareholders in
which the interests of one class differ from the interests of the other
class; and (c) the common shares shall have exclusive voting rights on
any matter submitted to shareholders that relates solely to the common
shares.
4. A Fund will comply with rule 18f-3(d) under the Investment
Company Act as if a Fund were a registered open-end management
investment company offering multiple classes of voting stock. For
purposes of complying with rule 18f-3(d) under the Investment Company
Act, a Fund will treat the common shares and each individual series of
Tracking Shares as separate classes.
5. Other than as specifically described in the application, no Fund
will: (a) set the terms of the Tracking Shares or of the common shares
or otherwise adopt any arrangement in a manner that would cause the
Fund to issue one or more additional classes of senior securities, or
multiple series of a senior security in a manner inconsistent with
section 18(c) of the Investment Company Act; or (b) repurchase Common
Shares and/or Tracking Shares.
6. A Fund will comply with U.S. generally accepted accounting
principles and the requirements of Regulation S-X applicable to
registered investment companies with respect to the financial
information included in any filings made with the Commission and
reports transmitted to shareholders pursuant to section 30 of the
Investment Company Act and rules thereunder.
7. Before the first issuance of a Tracking Share in reliance upon
an order granted pursuant to the application, and before any material
changes to the Allocation Formula, a majority of the Board of a Fund,
including a majority of the trustees who are not interested persons of
the Fund, shall find that the Allocation Formula is based on objective
criteria and will treat holders of each series of Tracking Shares
fairly and equally.
In connection with their evaluation of the Allocation Formula, the
Board shall request and evaluate, and the Adviser shall furnish, such
information as may be reasonably necessary.
By the Commission.
Vanessa A. Countryman,
Secretary.
[FR Doc. 2026-05751 Filed 3-24-26; 8:45 am]
BILLING CODE 8011-01-P
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</html>Indexed from Federal Register on March 25, 2026.
This is legal information, not legal advice. Laws vary by jurisdiction and change frequently. Always verify current law with official sources and consult a licensed attorney in your jurisdiction for advice on your specific situation.