FR 2025-07083

The document in question is a notice from the Securities and Exchange Commission (SEC) that addresses an application made by Connetic Venture Capital Access Fund and Connetic RIA, LLC. The applicants are seeking exemptions that would allow them to issue multiple classes of shares, levy early withdrawal charges, and impose distribution and service fees based on assets. This notice informs the public and stakeholders that the SEC intends to grant the requested relief unless a hearing is requested before May 16, 2025.

General Summary

The SEC has published a notice for public awareness and feedback regarding the application by Connetic Venture Capital Access Fund and Connetic RIA, LLC. This application requests special permissions—namely, the ability to issue various classes of shares and charge different types of fees to investors. These kinds of exemptions are not automatically granted, as they deviate from the typical regulations under the Investment Company Act of 1940. The SEC is therefore transparent in its process, allowing stakeholders to express concerns or request a hearing on the matter.

Significant Issues and Concerns

Several issues and concerns arise from this document. Firstly, the document does not provide detailed financial information or justification for the requested exemptions. This lack of clarity might obscure the potential impact on investors who may be subject to these new charges and fees.

Moreover, while the document mentions "asset-based distribution and/or service fees," it does not precisely define these terms. A clearer explanation of these fees could help investors understand exactly what kind of charges they might incur. The document also lacks clarity about the criteria the SEC uses to evaluate the application, raising questions about how decisions are made and whether all applicants are treated equally.

The requirement for those requesting a hearing to provide proof of service, such as an affidavit or certificate of service, could deter public participation due to the technical nature and potential costs involved in meeting this criterion.

Impact on the Public and Stakeholders

For the general public, especially investors, the approval of this application could mean exposure to new types of investment opportunities. Still, it also poses a risk of increased costs due to the imposition of additional fees. Without a clear understanding of the financial impact of these fees, investors might find themselves at a disadvantage.

Specific stakeholders, like Connetic Venture Capital Access Fund and Connetic RIA, LLC, stand to benefit if their application is approved. They would gain greater flexibility in structuring their investment offerings, potentially appealing to a broader range of investors. However, this flexibility could come at the expense of transparency and simplicity for those investing in these funds.

Conclusion

In summary, this SEC document opens a window into the regulatory process of approving exceptions for investment funds. While the notice is part of ensuring transparency, it raises several concerns about clarity and accessibility for the average investor. The potential impacts—positive or negative—will largely depend on how these exemptions are implemented and communicated to investors. Therefore, stakeholders and the public must engage in this process, especially those directly affected by such regulatory changes.