FR 2025-07505

The document issued by the Securities and Exchange Commission (SEC) provides a notice regarding deregistration applications under section 8(f) of the Investment Company Act of 1940. This notice pertains to several investment companies seeking to be declared as no longer being investment companies. Some of these companies have transferred their assets or made liquidating distributions to shareholders, while others have never made a public offering of securities and do not plan to engage in business. The notice outlines the procedure for interested persons to request a hearing related to these applications, with a deadline of May 20, 2025.

Summary of the Document

The SEC's notice lists several closed-end investment companies, including AB CarVal Opportunistic Credit Fund, Federated Hermes Government Income Securities, Inc., PMF Fund, L.P., PMF TEI Fund, and Stock Dividend Fund, Inc. Each of these companies is in the process of deregistration, albeit for different reasons. Some companies have already distributed their assets to shareholders, ceasing operations as investment companies, while others simply did not proceed with public offerings. Each of these companies has filed applications with the SEC to officially revoke their status under the Investment Company Act of 1940.

Significant Issues or Concerns

One concern with the document is its lack of criteria or justification for granting deregistration orders. Without clear guidelines, it may be ambiguous why some companies are granted deregistration while others might not be. This lack of transparency could lead to confusion regarding the SEC's decision-making process.

Another issue relates to the process for requesting a hearing. While the document outlines the need for "proof of service," it does not provide detailed guidance on what this entails. The potential inconsistency in requirements could deter stakeholders from effectively participating in the process.

Furthermore, the document mentions substantial expenses incurred in the liquidation of some funds, such as amounts of $304,087 and $222,425, but provides no details on how these were calculated or justified. This lack of transparency could raise questions among investors and stakeholders about the fairness and accuracy of these costs.

Impact on the Public

For the general public, this notice may appear overly complex due to the legal and financial terminology used. This complexity can limit accessibility and understanding for individuals who do not have expertise in these fields.

On a broader scale, the deregistration of these funds may have minimal direct impact on the general public unless individuals are shareholders or stakeholders in these specific investment companies. However, improved clarity and transparency in such notices could enhance trust and understanding among the public regarding how investment companies are regulated and dissolved.

Impact on Specific Stakeholders

For the companies involved, successful deregistration means they can officially cease operations under the constraints of the Investment Company Act, potentially reducing regulatory burdens and operational costs. This outcome is likely beneficial for companies that no longer function as active investment entities.

Shareholders of these companies may be directly impacted by the withdrawal process, particularly in terms of receiving distributions or understanding their investments' dissolution. Transparency about the distribution process and related expenses is crucial to maintaining trust and satisfaction among these stakeholders.

Additionally, individuals or entities interested in contesting the deregistration would need to navigate the outlined procedures to request a hearing, which could pose challenges due to the previously mentioned ambiguities and lack of procedural detail in the document.

In the reviewed Federal Register document, several financial references relate primarily to expenses incurred during the reorganization and liquidation of various investment entities. This commentary will address the specifics of these financial references, their implications, and any related issues identified in the document.

Financial References and Allocations

The document outlines three significant financial expenses related to the deregistration process under the Investment Company Act:

1. Federated Hermes Government Income Securities, Inc.: The expenses associated with the reorganization of this entity amounted to $26,049.87. These costs were borne by both the applicant and the applicant's administrator.

2. PMF Fund, L.P.: Liquidation expenses for this entity totaled $222,425. These costs were shouldered by the shareholders of the applicant.

3. PMF TEI Fund: Similarly, this fund incurred liquidation expenses amounting to $304,087, which were also paid for by the applicant's shareholders.

Issues and Implications

While the document adequately quantifies the financial costs of liquidation and reorganization, it does not provide a detailed explanation of how these expenses were calculated or justified. For example, the significant amounts of $304,087 and $222,425 in liquidation expenses might raise questions about the cost-efficiency and the nature of these expenditures. Stakeholders, including shareholders who ultimately bear these costs, might benefit from greater transparency regarding the expenses incurred.

Another issue identified is the lack of straightforward access to specific financial details via the SEC's EDGAR system. While the document directs readers to this platform, the absence of direct links to the pertinent applications might hinder the ability of stakeholders to promptly access and scrutinize detailed financial documents related to these expenses.

Lastly, the document does not specify how the expenses align with the SEC's criteria for granting deregistration orders. Understanding the connection between financial expenditures and regulatory decisions is crucial, particularly for entities or individuals considering filing similar applications or those interested in contesting deregistration.

In summary, while the document provides essential figures concerning financial outlays during the deregistration process, it could benefit stakeholders by offering deeper insights into the calculations and justifications of these expenses. Enhanced transparency in these areas may foster a clearer understanding of the financial landscape underpinning such regulatory processes.