Maryland
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000-54755
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45-3058280
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(State or Other Jurisdiction of Incorporation)
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(Commission File Number)
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(I.R.S. Employer Identification No.)
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3 Park Avenue, 36th Floor
New York, New York 10016
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(Address of Principal Executive Offices) |
(212) 418-4700
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(Registrant’s telephone number, including area code)
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Not applicable
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(Former name or former address, if changed since last report)
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Item 2.02. Results of Operations and Financial Condition. |
Item 9.01. Financial Statements and Exhibits. |
(d)
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Exhibits.
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EXHIBIT NUMBER
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DESCRIPTION
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14.1 | Code of Ethics of CĪON Investment Corporation and CĪON Investment Management, LLC | |
99.1
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Press release dated May 13, 2014
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SIGNATURES |
CĪON Investment Corporation
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Date:
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May 13, 2014
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By: /s/ Michael A. Reisner
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Co-President and Co-Chief Executive Officer |
EXHIBIT NUMBER
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DESCRIPTION
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14.1 | Code of Ethics of CĪON Investment Corporation and CĪON Investment Management, LLC | |
99.1
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Press release dated May 13, 2014
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(1)
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Employ any device, scheme or artifice to defraud the Company;
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(2)
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Make any untrue statement of a material fact or omit to state to the Company a material fact necessary in order to make the statement made, in light of the circumstances under which it is made, not misleading;
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(3)
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Engage in any act, practice, or course of business which operates or would operate as a fraud or deceit upon the Company; or
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(4)
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Engage in any manipulative practice with respect to the Company.
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(A)
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Access Person. “Access Person” means any director, officer, or “Advisory Person” of the Company or the Adviser.
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(B)
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Advisory Person. “Advisory Person” of the Company or the Adviser means: (i) any employee of the Company or the Adviser or of any company in a control relationship to the Company or the Adviser, who, in connection with his or her regular functions or duties, makes, participates in, or obtains information regarding the purchase or sale of a Covered Security (as defined below) by the Company, or whose functions relate to the making of any recommendations with respect to such purchases or sales; and (ii) any natural person in a control relationship to the Company or the Adviser who obtains information concerning recommendations made to the Company with regard to the purchase or sale of a Covered Security by the Company. For purposes of this Code, an Advisory Person shall be deemed to include such persons that otherwise would meet the definition of “Supervised Person” in Section 202(a)(25) of the Investment Advisers Act of 1940, as amended.1
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(C)
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Automatic Investment Plan. “Automatic Investment Plan” means a program in which regular periodic purchases (or withdrawals) are made automatically in (or from) investment accounts in accordance with a predetermined schedule and allocation. An Automatic Investment Plan includes a dividend reinvestment plan.
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(D)
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Beneficial Interest. “Beneficial Interest” includes any entity, person, trust, or account with respect to which an Access Person exercises investment discretion or provides investment advice. A beneficial interest shall be presumed to include all accounts in the name of or for the benefit of the Access Person, his or her spouse, dependent children, or any person living with him or her or to whom he or she contributes economic support.
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(E)
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Beneficial Ownership. “Beneficial Ownership” shall be determined in accordance with Rule 16a-1(a)(2) under the Securities Exchange Act of 1934, except that the determination of direct or indirect Beneficial Ownership shall apply to all securities, and not just equity securities, that an Access Person has or acquires. Rule 16a-1(a)(2) provides that the term “beneficial owner” means any person who, directly or indirectly, through any contract, arrangement, understanding, relationship, or otherwise, has or shares a direct or indirect pecuniary interest in any equity security. Therefore, an Access Person may be deemed to have Beneficial Ownership of securities held by members of his or her immediate family sharing the same household, or by certain partnerships, trusts, corporations, or other arrangements.
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(F)
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Chief Compliance Officer. “Chief Compliance Officer” means the Chief Compliance Officer of the Company. The Chief Compliance Officer is David J. Verlizzo. For purposes of this Code, “Chief Compliance Officer” shall be deemed to include his or her designees.
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(G)
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Control. “Control” shall have the same meaning as that set forth in Section 2(a)(9) of the 1940 Act.
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(H)
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Covered Security. “Covered Security” means a security as defined in Section 2(a)(36) of the 1940 Act, except that it does not include (i) direct obligations of the Government of the United States; (ii) banker’s acceptances, bank certificates of deposit, commercial paper and high quality short-term debt instruments including repurchase agreements; and (iii) shares issued by registered open-end investment companies (i.e., mutual funds); however, exchange traded funds structured as unit investment trusts or open-end funds are considered “Covered Securities”.
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(I)
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Company. The “Company” means CĪON Investment Corporation, a Maryland corporation.
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(J)
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Designated Officer. “Designated Officer” shall mean the officer of the Company designated by the Board of Directors from time to time to be responsible for management of compliance with this Code. The Designated Officer may appoint a designee to carry out certain of his or her functions pursuant to this Code. Unless otherwise indicated, the Designated Officer will be the Chief Compliance Officer.
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(K)
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Disinterested Director. “Disinterested Director” means a director of the Company who is not an “interested person” of the Company within the meaning of Section 2(a)(19) of the 1940 Act.
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(L)
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Initial Public Offering. “Initial Public Offering” means an offering of securities registered under the Securities Act of 1933 (the “Securities Act”), the issuer of which, immediately before the registration, was not subject to the reporting requirements of Sections 13 or 15(d) of the Securities Exchange Act of 1934.
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(M)
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Investment Personnel. “Investment Personnel” means: (i) any employee of the Company (or of any company in a control relationship to the Company) who, in connection with his or her regular functions or duties, makes or participates in making recommendations regarding the purchase or sale of securities by the Company; and (ii) any natural person who controls the Company and who obtains information concerning recommendations regarding the purchase or sale of securities by the Company.
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(N)
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Limited Offering. “Limited Offering” means an offering that is exempt from registration under the Securities Act pursuant to Section 4(2) or Section 4(6) or pursuant to Rule 504, Rule 505 or Rule 506 under the Securities Act.
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(O)
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Manual. “Manual” means the Adviser’s Compliance Manual.
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(P)
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Purchase or Sale of a Covered Security. “Purchase or Sale of a Covered Security” is broad and includes, among other things, the writing of an option to purchase or sell a covered security, or the use of a derivative product to take a position in a Covered Security.
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(Q)
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Restricted List. “Restricted List” means a list of securities or other investments that may pose a conflict of interest or similar concern for the Company and/or the Adviser.
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SECTION III: STANDARDS OF CONDUCT
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(1)
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No Access Person shall engage, directly or indirectly, in any business transaction or arrangement for personal profit that is inconsistent with the best interests of the Company or its shareholders; nor shall he or she make use of any confidential information gained by reason of his or her employment by or affiliation with the Company or affiliates thereof in order to derive a personal profit for himself or herself or for any Beneficial Interest, in violation of the fiduciary duty owed to the Company or its shareholders.
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(2)
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Any Access Person recommending or authorizing the purchase or sale of a Covered Security by the Company shall, at the time of such recommendation or authorization, disclose any Beneficial Interest in, or Beneficial Ownership of, such Covered Security or the issuer thereof.
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(3)
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No Access Person shall dispense any information concerning securities holdings or securities transactions of the Company or the Adviser to anyone outside the Company, without obtaining prior written approval from the Designated Officer, or such person or persons as these individuals may designate to act on their behalf. Notwithstanding the preceding sentence, such Access Person may dispense such information without obtaining prior written approval:
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(a)
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when there is a public report containing the same information;
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(b)
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when such information is dispensed in accordance with compliance procedures established to prevent conflicts of interest between the Company and its affiliates;
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(c)
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when such information is reported to directors of the Company; or
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(d)
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in the ordinary course of his or her duties on behalf of the Company.
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(4)
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Conflicts of Interest. Conflicts of interest may exist between various individuals and entities, including CĪON Investment, Access Persons, and current or prospective Clients. Any failure to identify or properly address a conflict can have severe negative repercussions for CĪON Investment, its Access Persons, and/or clients. In some cases, the improper handling of a conflict could result in litigation and/or disciplinary action.
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It may sometimes be beneficial for CĪON Investment to be able to retroactively demonstrate that it carefully considered particular conflicts of interest. The Chief Compliance Officer may use the form of Conflicts of Interest Log attached hereto as Exhibit A or similar form to document CĪON Investment’s assessment of, and response to, such conflicts. Reference also is made to the “Conflicts of Interest” policy contained in the Code of Conduct attached as Appendix D-2 to the Manual.
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(1)
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General Prohibition. No Access Person shall purchase or sell, directly or indirectly, any Covered Security in which he or she has, or by reason of such transaction acquires, any direct or indirect Beneficial Ownership and which such Access Person knows or should have known at the time of such purchase or sale is being considered for purchase or sale by the Company or Client of the Adviser, or is held in the portfolio of the Company, unless such Access Person shall have obtained prior written approval for such purpose from the Designated Officer.
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(a)
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An Access Person who becomes aware that CĪON Investment is considering the purchase or sale of any Covered Security by any person (an issuer) must immediately notify the Designated Officer of any interest that such Access Person may have in any outstanding Covered Securities of that issuer.
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(b)
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An Access Person shall similarly notify the Designated Officer of any other interest or connection that such Access Person might have in or with such issuer.
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(c)
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Once an Access Person becomes aware that CĪON Investment is considering the purchase or sale of a Covered Security or that the Company holds a Covered Security in its portfolio, such Access Person may not engage, without prior approval of the Designated Officer, in any transaction in any Covered Securities of that issuer.
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(d)
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The foregoing notifications or permissions shall be in writing; however, the Chief Compliance Officer may waive this requirement in his sole discretion.
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(2)
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Initial Public Offerings and Limited Offerings. Investment Personnel must obtain approval from the Company’s Chief Compliance Officer or the Adviser’s Chief Compliance Officer before directly or indirectly acquiring beneficial ownership in any securities in an Initial Public Offering or in a Limited Offering.
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(3)
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Blackout Periods. No Investment Personnel shall execute a securities transaction in any security that the Company owns or is considering for purchase or sale.
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(4)
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Company Acquisition of Shares in Companies that Investment Personnel Hold Through Limited Offerings. Investment Personnel who have been authorized to acquire securities in a Limited Offering must disclose that investment to the Designated Officer when they are involved in the Company’s subsequent consideration of an investment in the issuer, and the Company’s decision to purchase such securities must be independently reviewed by Investment Personnel with no personal interest in that issuer.
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(5)
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Gifts. As a general matter, no Access Person may accept, directly or indirectly, any gift, favor, or service of more than a de minimis value from any person with whom he or she transacts business on behalf of CĪON Investment under circumstances when to do so would conflict with CĪON Investment’s best interests or would impair the ability of such person to be completely disinterested when required, in the course of business, to make judgments and/or recommendations on behalf of CĪON Investment. For the detailed gift policy, reference is made to the “Gift” policy contained in Appendix E attached to the Manual.
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(6)
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Service as Director. No Access Person shall serve on the board of directors of a portfolio company of the Company without prior written authorization of the Designated Officer based upon a determination that the board service would be consistent with the interests of the Company and its shareholders and the Adviser.
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(7)
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Restricted List. No Access Person may engage in any transaction relating to a security on the Restricted List.
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(A)
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Applicability
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(1)
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with respect to transactions effected for, and Covered Securities held in, any account over which the Access Person has no direct or indirect influence or control;
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(2)
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a Disinterested Director, who would be required to make a report solely by reason of being a Director, need not make: (1) an initial holdings or an annual holdings report; and (2) a quarterly transaction report, unless the Disinterested Director knew or, in the ordinary course of fulfilling his or her official duties as a Director, should have known that during the 15-day period immediately before or after such Disinterested Director’s transaction in a Covered Security, the Company purchased or sold the Covered Security, or the Company or the Adviser considered purchasing or selling the Covered Security; and
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(3)
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an Access Person need not make a quarterly transaction report if the report would duplicate information contained in broker trade confirmations or account statements received by CĪON Investment with respect to the Access Person in the time required by subsection (B)(2) of this Section IV, if all of the information required by subsection (B)(2) of this Section IV is contained in the broker trade confirmations or account statements, or in the records of CĪON Investment, as specified in subsection (B)(4) of this Section IV.
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(B)
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Report Types
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(1)
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Initial Holdings Report. An Access Person must file an initial holdings report not later than ten (10) days after that person became an Access Person. The initial holdings report must: (a) contain the title, number of shares and principal amount of each Covered Security in which the Access Person had any direct or indirect beneficial ownership when the person became an Access Person; (b) identify any broker, dealer or bank with whom the Access Person maintained an account in which any Covered Securities were held for the direct or indirect benefit of the Access Person as of the date the person became an Access Person; and (c) indicate the date that the report is filed with the Designated Person. Initial holdings reports also must disclose the existence of all accounts that hold any securities, even if none of those securities fall within the definition of a Covered Security. A copy of a form of such report is attached hereto as Exhibit B; provided, however, the Company may utilize a software solution for reporting of such holdings.
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(2)
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Quarterly Transaction Report. Except as set forth in Section IV(B)(4) below, an Access Person must file a quarterly transaction report not later than thirty (30) days after the end of a calendar quarter.
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(a)
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With respect to any transaction made during the reporting quarter in a Covered Security in which such Access Person had any direct or indirect beneficial ownership, the quarterly transaction report must contain: (i) the transaction date, title, interest date and maturity date (if applicable), the number of shares and the principal amount of each Covered Security; (ii) the nature of the transaction (i.e., purchase, sale or any other type of acquisition or disposition); (iii) the price of the Covered Security at which the transaction was effected; (iv) the name of the broker, dealer or bank through which the transaction was effected; and (v) the date that the report is submitted by the Access Person. A copy of a form of such report is attached hereto as Exhibit C; provided, however, CĪON Investment may utilize a software solution for reporting such holdings.
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(b)
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With respect to any account established by the Access Person in which any securities were held during the quarter for the direct or indirect benefit of the Access Person, the quarterly transaction report must contain: (i) the name of the broker, dealer or bank with whom the Access Person established the account; (ii) the date the account was established; and (iii) the date that the report is submitted by the Access Person.
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(3)
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Annual Holdings Report. After the date on which a person becomes an Access Person, an Access Person must file an annual holdings report as of a date established by the Chief Compliance Officer. The annual report must contain the following information (which information must be current as of a date no more than 45 days before the report is submitted): (a) the title, number of shares, and principal amount of each Covered Security in which the Access Person had any direct or indirect beneficial ownership; (b) the name of any broker, dealer or bank in which any Covered Securities are held for the direct or indirect benefit of the Access Person; and (c) the date the report is submitted. Annual holding reports must disclose the existence of all accounts that hold any securities, even if none of those securities fall within the definition of a Covered Security. A copy of a form of such report is attached hereto as Exhibit D; provided, however, CĪON Investment may utilize a software solution for reporting such holdings.
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(4)
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Account Statements. At the CCO’s request, an Access Person will direct his or her broker to provide to the Designated Officer copies of periodic statements for all investment accounts in which they have Beneficial Ownership (“Account Statements”). To the extent such Account Statements provide the information required in quarterly transaction reports, as set forth above, such Access Person will not be required to file such quarterly transaction reports. Notwithstanding the foregoing, the Designated Officer may require any Access Person to file quarterly transaction reports in his sole discretion.
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(5)
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Company Reports. No less frequently than annually, the Company and the Adviser must furnish to the Company’s board of directors (the “Board”), and the Company’s Board must consider, a written report that:
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(a)
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describes any issues arising under the Code or its procedures since the last report to the Board, including but not limited to, information about material violations of the Code or its procedures and sanctions imposed in response to the material violations; and
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(b)
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certifies that the Company or the Adviser, as applicable, has adopted procedures reasonably necessary to prevent Access Persons from violating the Code.
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(6)
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Pre-Clearance Reports. Access Persons must have written clearance from the Designated Officer for all Covered Security transactions (including, but not limited to: IPOs, Limited Offerings, and issuers on the Restricted List) before completing the transactions. CĪON Investment may disapprove any proposed transaction, particularly if the transaction appears to pose a conflict of interest or otherwise appears improper. Access Persons will submit requests for pre-clearance of Covered Security transactions using the Trade Pre-Clearance Form attached as Exhibit E or similar document authorized by the Chief Compliance Officer; provided, however, CĪON Investment may utilize a software solution for submitting and making determinations with respect to such requests.
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(C)
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Disclaimer of Beneficial Ownership. Any report required under this Section IV may contain a statement that the report shall not be construed as an admission by the person submitting such duplicate confirmation or account statement or making such report that he or she has any direct or indirect beneficial ownership in the Covered Security to which the report relates.
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(D)
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Managed Accounts. An Access Person is not required to submit reports with respect to securities held in accounts over which the Access Person had no direct or indirect influence or control, such as a managed account by an investment adviser on a discretionary basis. For these accounts, the Access Persons must submit a (i) copy of the discretionary account agreement; and (ii) written certification from the unaffiliated investment adviser at the time of becoming an Access Person or account opening and annually, thereafter, that certifies that the Access Person has no discretion or control over the transactions. The Chief Compliance Officer is responsible for maintaining discretionary account agreements and certifications.
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(E)
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Review of Reports. The reports required to be submitted under this Section IV shall be delivered to the Chief Compliance Officer. The Chief Compliance Officer shall review such reports, including custodian/broker statements, to determine whether any transactions recorded therein constitute a violation of the Code. Before making any determination that a violation has been committed by any Access Person, such Access Person shall be given an opportunity to supply additional explanatory material. The Chief Compliance Officer shall maintain copies of the reports as required by Rule 17j-1(f). A member of the Legal Department will monitor the Chief Compliance Officer’s personal securities transactions for compliance with this policy.
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(F)
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Acknowledgment and Certification. Upon becoming an Access Person and annually thereafter, all Access Persons shall sign an “acknowledgment and certification” of their receipt of and intent to comply with this Code in the form attached hereto as Exhibit F and return it to the Designated Officer. Each Advisory Person must also certify annually that he or she has read and understands the Code and recognizes that he or she is subject to the Code. In addition, each Access Person must certify annually that he or she has complied with the requirements of the Code and that he or she has disclosed or reported all personal securities transactions required to be disclosed or reported pursuant to the requirements of the Code. The Designated Officer may use the form of Code of Ethics Acknowledgment Log attached as Exhibit G or similar form to document the Company’s receipt of the acknowledgment and certification of the Code of Ethics and the Code of Conduct provided, however, CĪON Investment may utilize a software solution for such receipt of the acknowledgment and certification of the Code of Ethics and the Code of Conduct.
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(G)
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Records. CĪON Investment shall maintain records with respect to this Code in the manner and to the extent set forth below, which records may be maintained on microfilm or electronic storage media under the conditions described in Rule 31a-2(f) under the 1940 Act and Rule 204-2 under the Advisers Act and shall be available for examination by representatives of the Securities and Exchange Commission (the “SEC”):
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(1)
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A copy of this Code and any other code of ethics of the Company or the Adviser that is, or at any time within the past six years has been, in effect shall be maintained in an easily accessible place;
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(2)
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A record of any violation of this Code and of any action taken as a result of such violation shall be maintained in an easily accessible place for a period of not less than five years following the end of the fiscal year in which the violation occurs;
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(3)
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A copy of each report made by an Access Person or duplicate account statement received pursuant to this Code, including any information provided in addition to the reports under subsection (A)(3) of this Section IV shall be maintained for a period of not less than five years from the end of the fiscal year in which it is made or the information is provided, the first two years in an easily accessible place;
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(4)
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A record of all persons who are, or within the past five years have been, required to make reports pursuant to this Code, or who are or were responsible for reviewing these reports, shall be maintained in an easily accessible place;
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(5)
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A copy of each report required under subsection (B)(5) of this Section IV shall be maintained for at least five years after the end of the fiscal year in which it is made, the first two years in an easily accessible place; and
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(6)
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A record of any decision and the reasons supporting the decision, to approve the direct or indirect acquisition by an Access Person of beneficial ownership in any securities in an Initial Public Offering or Limited Offering shall be maintained for at least five years after the end of the fiscal year in which the approval is granted.
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(H)
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Confidentiality. All reports of Covered Securities transactions, duplicate confirmations, account statements and other information filed with CĪON Investment or furnished to any person pursuant to this Code shall be treated as confidential, but are subject to review as provided herein and by representatives of the SEC or otherwise to comply with applicable law or the order of a court of competent jurisdiction.
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(A)
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Confidentiality of the Company’s Transactions Until disclosed in a public report to shareholders or to the SEC in the normal course, all information concerning the securities “being considered for purchase or sale” by the Company shall be kept confidential by all Covered Personnel and disclosed by them only on a “need to know” basis. It shall be the responsibility of the Chief Compliance Officer to report any inadequacy found in this regard to the directors of the Company.
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(B)
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Outside Business Activities and Directorships. Access Persons may not engage in any outside business activities that may give rise to conflicts of interest or jeopardize the integrity or reputation of the Company. Similarly, no such outside business activities may be inconsistent with the interests of the Company. All directorships of public or private companies held by Access Persons shall be reported to the Chief Compliance Officer.
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(C)
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Gratuities. As a general matter, Covered Personnel shall not, directly or indirectly, take, accept or receive gifts or other consideration in merchandise, services or otherwise of more than nominal value from any person, firm, corporation, association or other entity other than such person’s employer that does business, or proposes to do business, with the Company. For the detailed gift policy of CĪON Investment, reference is made to the “Gift” policy attached to the Manual as APPENDIX E.
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Actual or Apparent Conflict between:
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Conflict Description
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Mitigating Disclosures Summary
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Mitigating Controls Summary
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Date of Inclusion on the Log1
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Party or Parties
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Party or Parties
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Name
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Hire Date
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Date of Initial Acknowledgement
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Dates of Subsequent Acknowledgements
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Date
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Date
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Date
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Date
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Date
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Date
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·
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Total investment return-net asset value was 2.63%1 during the three months ended March 31, 2014.
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·
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CĪON declared cash distributions to shareholders totaling $0.1679 per share during the three months ended March 31, 2014, which were fully covered by taxable income.
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·
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Since its commencement of operations on December 17, 2012, CĪON increased its gross share price six times. CĪON’s gross share price increased from $10.00 to $10.45, a cumulative increase of $0.45 per share.
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·
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As of March 31, 2014, CĪON had an interest in investments in 102 portfolio companies, of which2:
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o
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97.1% were senior secured investments (72.4% first lien, 24.7% second lien); and
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o
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100% were floating rate investments.
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·
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As of March 31, 2014, CĪON’s portfolio of owned investments consisted of 39 portfolio companies with an average and median EBITDA (a non-GAAP measure commonly used by lenders to evaluate a company’s profitability) of approximately $50.7 million and $47.7 million, respectively, at initial investment.3
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