3c1 Exemption - counting beneficial owners - 99 investor limit

Funds with a 3c1 exemption can’t have more than 99 beneficial owners. So, how do you count them?

Here are some general rules:

1. Count each individual investor.
2. If an investor has two accounts (like an individual account and an SD-IRA account), only count them once since they own both accounts.
3. If an entity invests, you may need to count the individual investors within it. Here’s when to look through and count the beneficial owners:
   • The entity is another investment company (like a 3c1 fund or SPV) and will own more than 10% of the voting share. However, this likely won’t apply because the entity won’t hold a voting share in the Customizable Fund™.
   • The entity was created just to invest in your fund, defined by the 40% rule. If over 40% of its assets are invested in your fund, you need to look through and count.
   • The entity lets its investors decide whether or not to join in the fund’s investment. Since Customizable Funds™ do this, this rule applies.

With this in mind:

• A Customizable Fund™ with a 3c1 exemption should not invest in another 3c1 fund.
• A Customizable Fund™ with a 3c1 exemption can invest in a 3c5 fund, as the 99-investor limit doesn’t apply to 3c5 funds.
• A Customizable Fund™ with a 3c5 exemption should not invest in another 3c1 fund.