SEC Withdraws Registration Exemption for Investment Trust

The SEC permanently suspended an exemption from registration that had been granted to an investment trust after it failed to promptly commence offerings following qualification for the exemption.

In an Order, the SEC stated that the trust failed to comply with the terms of the previously granted exemption. The SEC said that the trust was required to commence its qualified continuous offering within two calendar days of qualifying for the exemption, but that the trust had yet to do so as indicated in its semi-annual report.The SEC also found that the trust improperly raised its maximum offering amount from $50 million to $75 million without (i) filing an offering statement or post-qualification amendment or (ii) seeking review or comment on the increase from the SEC Division of Corporation Finance. Further, the SEC stated that the trust failed to (i) make accurate representations regarding whether fund management fees would be charged and (ii) provide accurate summaries for other fees.

SEC Commissioner Mark T. Uyeda commented that the enforcement Order "should not be read as expanding the requirements of the rule," and the "only relevant fact" was "whether an offering commenced within two calendar days after the qualification date" of the exemption.