[Federal Register Volume 85, Number 219 (Thursday, November 12, 2020)]
[Notices]
[Pages 71971-71973]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-24956]


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SECURITIES AND EXCHANGE COMMISSION

[Investment Advisers Act Release No. 5624/803-00252]


Arena Holdings Management LLC

November 5, 2020.
AGENCY:  Securities and Exchange Commission (``Commission'').

ACTION: Notice.

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    Notice of application for an exemptive order under Section 
202(a)(11)(H) of the Investment Advisers Act of 1940 (``Advisers 
Act'').
    Applicant: Arena Holdings Management LLC (the ``Applicant'').
    Relevant Advisers Act Sections: Exemption requested under Section 
202(a)(11)(H) of the Advisers Act from Section 202(a)(11) of the 
Advisers Act.
    Summary of Application: The Applicant requests that the Commission 
issue an order declaring it to be a person not within the intent of 
Section 202(a)(11) of the Advisers Act, which defines the term 
``investment adviser.''

[[Page 71972]]

    Filing Dates: The application was filed on November 13, 2019 and 
amended on August 4, 2020.
    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 Secretarys-Office@sec.gov 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 November 30, 2020, 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 emailing the Commission's Secretary at Secretarys-Office@sec.gov.

ADDRESSES:  The Commission: Secretarys-Office@sec.gov. Applicant: Arena 
Holdings Management LLC, jbergman@brickpatel.com.

FOR FURTHER INFORMATION CONTACT:  Asaf Barouk, Attorney-Adviser, at 
202-551-4029 or Parisa Haghshenas, 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 either at http://www.sec.gov/rules/iareleases.shtml or by calling (202) 551-8090.

Applicant's Representations

    1. The Applicant is a multi-generational, single-family office that 
provides or intends to provide services to the family and descendants 
of Roopa Dewan. The Applicant is wholly owned by Family Clients and is 
exclusively controlled (directly and indirectly) by one or more Family 
Members and/or Family Entities in compliance with Rule 202(a)(11)(G)-1 
(the ``Family Office Rule''). For purposes of the application, the term 
``Dewan Family'' means the lineal descendants of Roopa Dewan, their 
spouses or spousal equivalents, and all other persons and entities that 
qualify as ``Family Clients'' as defined in paragraph (d)(4) of the 
Family Office Rule. Unless otherwise indicated, capitalized terms 
herein have the same meaning as defined in the Family Office Rule.
    2. The Applicant provides both advisory and non-advisory services 
(collectively, the ``Services'') to members of the Dewan Family. Any 
Service provided by the Applicant that relates to investment advice 
about securities or may otherwise be construed as advisory in nature is 
considered an ``Advisory Service.''
    3. The Applicant represents that: (i) Each of the persons served by 
the Applicant is a Family Client (i.e., the Applicant has no investment 
advisory clients other than Family Clients as required by paragraph 
(b)(1) of the Family Office Rule); (ii) the Applicant is owned and 
controlled in a manner that complies in all respects with paragraph 
(b)(2) of the Family Office Rule; and (iii) the Applicant does not hold 
itself out to the public as an investment adviser as required by 
paragraph (b)(3) of the Family Office Rule. At the time of this 
Application, Applicant provides Advisory Services solely to Family 
Clients, including primarily to pooled investment vehicles that are 
wholly owned, directly or indirectly, by one or more natural persons 
that are Family Clients and operated for the sole benefit of those 
clients.
    4. In addition to the Family Clients, the Applicant desires to 
provide Services (including Advisory Services) to the siblings of a 
spouse of a lineal descendant of Roopa Dewan (which descendant is the 
founder and Chief Executive Officer of Applicant) and their spouses and 
descendants (the ``Additional Family Clients'').
    5. The Additional Family Clients do not have an ownership interest 
in the Applicant. The Applicant represents that the assets beneficially 
owned by Family Members and/or Family Entities (excluding the 
Additional Family Clients) would make up at least 95% of the total 
assets for which the Applicant provides Advisory Services.
    6. The Applicant represents that the Additional Family Clients have 
important familial ties to and are an integral part of the Dewan 
Family. The Applicant maintains that including the Additional Family 
Clients into the definition of ``family'' for this purpose simply 
recognizes and memorializes the familial ties and intra-familial 
relationships that already exist, and have existed for at least 25 
years and that the inclusion of the Additional Family Clients as 
members of the Dewan Family for which the Applicant may provide 
Services would be consistent with the existing familial relationship 
among the family members.

The Applicant's Legal Analysis

    1. Section 202(a)(11) of the Advisers Act defines the term 
``investment adviser'' to mean ``any person who, for compensation, 
engages in the business of advising others, either directly or through 
publications or writings, as to the value of securities or as to the 
advisability of investing in, purchasing, or selling securities, or 
who, for compensation and as part of a regular business, issues or 
promulgates analyses or reports concerning securities . . .''
    2. The Applicant falls within the definition of an investment 
adviser under Section 202(a)(11). The Family Office Rule provides an 
exclusion from the definition of investment adviser for which the 
Applicant is currently eligible but would no longer qualify if the 
Applicant provides Services to the Additional Family Clients. Because 
the Applicant has regulatory assets under management of more than $100 
million, it is not prohibited from registering with the Commission 
under Section 203A(a) of the Advisers Act. In sum, absent relief, if 
the Applicant opted to render Services to the Additional Family 
Clients, the Applicant would be required to register under Section 
203(a) of the Advisers Act, notwithstanding that (i) the Applicant does 
not hold itself out to the public as an investment adviser and does not 
market non-public offerings to persons or entities that are not Family 
Clients, (ii) the Applicant is wholly owned by Family Clients and 
controlled by Feroz Dewan who is a member of the Dewan Family, in 
accordance with paragraph (b)(2) of the Family Office Rule; and (iii) 
the Applicant is a ``family office'' for the Dewan Family and will not 
offer its Advisory Services to anyone other than Family Clients and the 
Additional Family Clients.
    3. The Applicant submits that its proposed relationship with the 
Additional Family Clients does not change the nature of the office into 
that of a commercial advisory firm. In addition, the Applicant notes 
that if the siblings of Mrs. Dewan were the siblings of a lineal 
descendant, rather than the siblings of a spouse of a lineal 
descendant, there would be no question that each of them would be a 
Family Member, and their retirement assets would similarly fall within 
the definition of Family Client. The Applicant states that in 
requesting the order, the Applicant is not attempting to expand its 
operations or engage in any level of commercial activity to which the 
Advisers Act is designed to apply. There would only be two natural 
persons and their spouses and

[[Page 71973]]

descendants who are not Family Members to whom the Applicant would 
provide Advisory Services if relief were granted. The Applicant 
estimates that if the Additional Family Clients' assets were managed by 
the Applicant, the assets owned by the Additional Family Clients would 
represent less than five percent (5%) of the Applicant's assets under 
management. From the perspective of the Dewan Family, allowing the 
Applicant to provide Services to the Additional Family Clients is 
consistent with the existing familial relationship among family 
members.
    4. The Applicant also submits that there is no public interest in 
requiring the Applicant to be registered under the Advisers Act. The 
Applicant states that the office is a private organization that was 
formed to be the ``family office'' for the Dewan Family and that the 
office does not have any public clients. The Applicant maintains that 
the office's Advisory Services are exclusively tailored to the needs of 
the Extended Dewan Family. The Applicant argues that the provision of 
Advisory Services to the Additional Family Clients, does not create any 
public interest that would require the office to be registered under 
the Advisers Act that is different in any manner than the 
considerations that apply to a ``family office'' that complies in all 
respects with the Family Office Rule.
    5. The Applicant argues that although the Family Office Rule 
largely codified the exemptive orders that the Commission had 
previously issued before the enactment of the Dodd-Frank Wall Street 
Reform and Consumer Protection Act, the Commission recognized in 
proposing the rule that the exact representations, conditions, or terms 
contained in every exemptive order could not be captured in a rule of 
general applicability. The Commission noted that family offices would 
remain free to seek a Commission exemptive order to advise an 
individual or entity that did not meet the proposed family client 
definition, and that certain issues would be more appropriately 
addressed through an exemptive order process where the Commission can 
consider the specific facts and circumstances, than through a rule of 
general applicability.
    6. The Applicant maintains that, based on its circumstances--
desiring to provide Advisory Services to certain Additional Family 
Clients who are relatives that have been considered and treated as 
family members for twenty-five (25) years and whose status as clients 
of the office would not change the nature of the office's operations to 
that of a commercial advisory business--an exemptive order is 
appropriate based on the Applicant's specific facts and circumstances.
    7. For the foregoing reasons, the Applicant requests an order 
declaring it to be a person not within the intent of Section 202(a)(11) 
of the Advisers Act. The Applicant submits that the order is necessary 
and appropriate, in the public interest, consistent with the protection 
of investors, and consistent with the purposes fairly intended by the 
policy and provisions of the Advisers Act.

The Applicant's Conditions

    1. The Applicant will offer and provide Advisory Services only to 
Family Clients and to the Additional Family Clients, who generally will 
be deemed to be, and be treated as if they were, Family Clients; 
provided, however, that the Additional Family Clients will be deemed to 
be, and treated as if they were, Family Members for purposes of 
paragraph (b)(1) and for purposes of paragraph (d)(4)(vi) of the Family 
Office Rule.
    2. The Applicant will at all times be wholly owned by Family 
Clients and exclusively controlled (directly or indirectly) by one or 
more Family Members and/or Family Entities (excluding the Additional 
Family Clients' Family Entities) as defined in paragraph (d)(5) of the 
Family Office Rule.
    3. At all times the assets beneficially owned by Family Members 
and/or Family Entities (excluding the Additional Family Clients' Family 
Entities), will account for at least 95% of the assets for which the 
Applicant provides Advisory Services.
    4. The Applicant will comply with all the terms for exclusion from 
the definition of investment adviser under the Advisers Act set forth 
in the Family Office Rule except for the limited exception requested by 
this Application.

    For the Commission, by the Division of Investment Management, 
under delegated authority.
J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2020-24956 Filed 11-10-20; 8:45 am]
BILLING CODE 8011-01-P


