
[Federal Register Volume 80, Number 248 (Monday, December 28, 2015)]
[Notices]
[Pages 80857-80859]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2015-32579]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. IC-31946; 811-8025]


Self Storage Group, Inc.; Notice of Application

December 21, 2015.

AGENCY:  Securities and Exchange Commission (``Commission'').

ACTION: Notice of application for deregistration under section 8(f) of 
the Investment Company Act of 1940 (the ``Act'').

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Summary of Application:  Self Storage Group, Inc. requests an order 
declaring that it has ceased to be an investment company.

Applicant:  Self Storage Group, Inc.

Filing Dates:  The application was filed on March 28, 2014, and amended 
on September 19, 2014, and September 25, 2015.

Hearing or Notification of Hearing:  An order granting the request will 
be issued unless the Commission orders a hearing. Interested persons 
may request a hearing by writing to the Commission's Secretary and 
serving applicant with a copy of the request, personally or by mail. 
Hearing requests should be received by the Commission by 5:30 p.m. on 
January 15, 2016, and should be accompanied by proof of service on 
applicant, 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 writing to the Commission's Secretary.

ADDRESSES: The Commission: Secretary, U.S. Securities and Exchange 
Commission, 100 F Street NE., Washington, DC 20549-1090. Applicant: 11 
Hanover Square, 12th Floor, New York, NY 10005.

FOR FURTHER INFORMATION CONTACT:  Christine Y. Greenlees, Senior 
Counsel, at (202) 551-6879, or David P. Bartels, Branch Chief, at (202) 
551-6821 (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 Web site 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.

Applicant's Representations

    1. From 1983 through 1996, applicant operated as a diversified 
series of shares of Bull & Bear Incorporated, an open-end management 
investment company. Applicant became separately incorporated under the 
laws of the State of Maryland in December 1996 and registered under the 
Act as a closed-end management investment company in January 1997. 
Applicant, formerly known as Global Income Fund, Inc., changed its name 
to Self Storage Group, Inc., effective November 2013.
    2. On February 29, 2012, applicant's stockholders approved a 
proposal to change the nature of applicant's business so as to cease to 
be an investment company and to become an operating company that would 
own, operate, manage, acquire, develop and redevelop professionally 
managed self storage facilities and would seek to qualify as a real 
estate investment trust (``REIT'') for federal tax purposes (the 
``Business Proposal'').\1\ Applicant states that, for this purpose, 
``professionally managed self storage facility'' refers to a type of 
real property that offers storage space rental, generally on a month-
to-month basis, for personal or business use. Applicant represents that 
it manages and operates each of its self

[[Page 80858]]

storage facilities using its own personnel and does not intend to 
retain third party management for any of its self storage facilities.
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    \1\ The Business Proposal permits applicant to invest in ``real 
estate assets,'' which according to applicant the Internal Revenue 
Code defines to include, in addition to real property, interests in 
REITs, interests in mortgages on real property and other investments 
in the real estate investment, service and related industries. 
Applicant concedes that some or all of these additional types of 
assets may be considered investment securities within the meaning of 
section 3(a)(2) of the Act. However, applicant intends to invest 
primarily in real property self storage facilities and represents 
that it will limit its investments in other real estate assets to 
avoid classification as an investment company under the Act.
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    3. Applicant states that, following stockholder approval, it has 
taken steps to implement the Business Proposal. In particular, on June 
15, 2012, applicant's board of directors (the ``Board'') approved the 
termination of applicant's management contract with an outside 
investment adviser and applicant became internally managed by its 
officers and employees. In addition, applicant's management commenced 
seeking acquisition opportunities in real property self storage 
facilities. Applicant states that those efforts have resulted in its 
assets being concentrated in several wholly owned subsidiaries, all of 
which own and operate real property self storage facilities. Applicant 
represents that none of these subsidiaries is an investment company as 
defined in section 3(a) of the Act or is relying on the exception from 
the definition of investment company in section 3(c)(1) or section 
3(c)(7) of the Act.
    4. Applicant states that, as of December 31, 2014, and June 30, 
2015, applicant's wholly owned subsidiaries represented approximately 
81% and 82%, respectively, of its total assets measured at fair value 
on an unconsolidated basis (exclusive of Government securities and cash 
items), and each of applicant's wholly owned subsidiaries held at least 
90% of its assets in direct investments in real property self storage 
facilities. Applicant further states that, as of December 31, 2014, and 
June 30, 2015, its holdings of investment securities (as defined in 
section 3(a) of the Act) (``Investment Securities'') represented 
approximately 9% and 10%, respectively, and cash items represented 
approximately 10% and 9% of its total assets on an unconsolidated 
basis.
    5. Applicant states that, for the six months ended June 30, 2015, 
on a consolidated basis, it derived approximately 69% of its gross 
income from its operation of self storage facilities, approximately 29% 
from realized gains from divestment of its holdings of Investment 
Securities, approximately 3% from dividends paid by its holdings of 
Investment Securities, and less than 1% from its cash items.\2\ 
Applicant anticipates currently that, for fiscal 2015, on a 
consolidated basis, it will derive approximately 75% of its gross 
income from its operation of self storage facilities, approximately 23% 
from realized gains from divestment of its holdings of Investment 
Securities, approximately 2% from dividends paid by its holdings of 
Investment Securities, and less than 1% from its cash items. In 
addition, applicant states that, for the last four fiscal quarters 
combined, no more than 45 percent of its consolidated net income after 
taxes was derived from securities (other than securities issued by 
companies (i) that are wholly owned by applicant, (ii) through which 
applicant engages in a business other than that of investing, 
reinvesting, owning, holding or trading in securities and (iii) that 
are not investment companies).
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    \2\ Applicant states that none of its subsidiaries derives any 
of its gross income from securities.
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    6. Applicant expects to continue to earn a majority of its gross 
income from its self storage facility operations and expects its income 
from Investment Securities and a time deposit to continue to decrease 
as it continues to divest its holdings of Investment Securities.
    7. Applicant represents that, since stockholders approved the 
Business Proposal, it has consistently represented to the public that 
it is primarily engaged in the business of owning, operating, managing, 
acquiring, developing, and redeveloping professionally managed self 
storage facilities. In addition, applicant asserts that its president 
and other officers spend substantially all of the time that they devote 
to applicant's business on (a) overseeing and guiding the management of 
its wholly owned subsidiaries' self storage facilities and (b) 
conducting strategic review of applicant's lines of business in order 
to determine if these units are appropriately structured to implement 
applicant's objectives. Applicant states that its president and other 
officers spend no time engaged in investing and reinvesting applicant's 
assets in Investment Securities other than to continue to divest 
applicant's holdings of Investment Securities. Likewise, applicant 
asserts that its Board has shifted its focus from oversight of a 
company engaged in the business of investing and reinvesting in 
securities to oversight of a company engaged in the business of owning 
and operating real property self storage facilities.
    8. Applicant states that it is not currently a party to any 
litigation or administrative proceeding and has timely complied with 
its obligations to file annual and other reports with the Commission.
    9. Applicant represents that, if the requested order is granted, it 
will seek to list its common stock on NASDAQ and will be subject to the 
reporting and other requirements of the Exchange Act.

Applicant's Legal Analysis

    1. Section 8(f) of the Act provides that whenever the Commission, 
upon application or its own motion, finds that a registered investment 
company has ceased to be an investment company, the Commission shall so 
declare by order and upon the taking effect of such order, the 
registration of such company shall cease to be in effect.
    2. Section 3(a)(1)(A) of the Act defines an ``investment company'' 
as any issuer that ``is or holds itself out as being engaged primarily, 
or proposes to engage primarily, in the business of investing, 
reinvesting, or trading in securities.'' Section 3(a)(1)(C) of the Act 
defines an ``investment company'' as any issuer that ``is engaged or 
proposes to engage in the business of investing, reinvesting, owning, 
holding, or trading in securities, and owns or proposes to acquire 
investment securities having a value exceeding 40 per centum of the 
value of such issuer's total assets (exclusive of Government securities 
and cash items) on an unconsolidated basis.'' \3\
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    \3\ Section 3(a)(2) of the Act defines ``investment securities'' 
as ``all securities except (A) Government securities, (B) securities 
issued by employees' securities companies, and (C) securities issued 
by majority-owned subsidiaries of the owner which (i) are not 
investment companies, and (ii) are not relying on the exception from 
the definition of investment company in paragraph (1) or (7) of 
subsection (c).''
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    3. Section 3(b)(1) of the Act provides that ``[n]otwithstanding 
paragraph (1)(C) of subsection (a), none of the following persons is an 
investment company within the meaning of this title: (1) Any issuer 
primarily engaged, directly or through a wholly owned subsidiary or 
subsidiaries, in a business or businesses other than that of investing, 
reinvesting, owning, holding, or trading in securities.'' Rule 3a-1 
under the Act states that ``[n]otwithstanding section 3(a)(1)(C) of the 
Act, an issuer will be deemed not to be an investment company under the 
Act, provided, that: (a) no more than 45 percent of the value (as 
defined in section 2(a)(41) of the Act) of such issuer's total assets 
(exclusive of Government securities and cash items) consists of, and no 
more than 45 percent of such issuer's net income after taxes (for the 
last four fiscal quarters combined) is derived from, securities other 
than: (1) Government securities; (2) securities issued by employees' 
securities companies; (3) securities issued by majority-owned 
subsidiaries of the issuer (other than subsidiaries relying on the 
exclusion from the definition of investment company in section 3(b)(3) 
or (c)(1) of the Act) which are not

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investment companies; and (4) securities issued by companies: (i) which 
are controlled primarily by such issuer; (ii) through which such issuer 
engages in a business other than that of investing, reinvesting, 
owning, holding or trading in securities; and (iii) which are not 
investment companies; (b) the issuer is not an investment company as 
defined in section 3(a)(1)(A) or 3(a)(1)(B) of the Act and is not a 
special situation investment company; and (c) the percentages described 
in paragraph (a) of this section are determined on an unconsolidated 
basis, except that the issuer shall consolidate its financial 
statements with the financial statements of any wholly-owned 
subsidiaries.''
    4. Applicant states that it is no longer an investment company as 
defined in section 3(a)(1)(A) or section 3(a)(1)(C). As noted above, 
applicant states that, for the last four fiscal quarters combined, no 
more than 45 percent of its consolidated net income after taxes was 
derived from securities (other than securities issued by companies (i) 
that are wholly owned by applicant, (ii) through which applicant 
engages in a business other than that of investing, reinvesting, 
owning, holding or trading in securities and (iii) that are not 
investment companies). Applicant asserts that it is primarily engaged 
in the business of owning, operating, managing, acquiring, developing, 
and redeveloping professionally managed self storage facilities through 
its wholly owned subsidiaries. Applicant argues that its historical 
development, its public representations, the activities of its 
directors and officers, the nature of its present assets and the 
sources of its present income support this assertion. Applicant states 
that it is thus qualified for an order of the Commission pursuant to 
section 8(f) of the Act.

    For the Commission, by the Division of Investment Management, 
under delegated authority.
Brent J. Fields,
Secretary.
[FR Doc. 2015-32579 Filed 12-24-15; 8:45 am]
 BILLING CODE 8011-01-P


