SEC Division of Investment Management staff letter: NexPoint Credit Strategies Fund

June 26, 2013
IM Ref. No. 20134121542
RESPONSE OF THE OFFICE OF CHIEF COUNSEL NexPoint Credit Strategies Fund DIVISION OF INVESTMENT MANAGEMENT File No. 811-21869 Your letter dated June 20,2013 requests our assurance that we would not recommend enforcement action to the Securities and Exchange Commission ("Commission") under Section 5(b) or Section 6(a) of the Securities Act of 1933 (the "Securities Act") against NexPoint Credit Strategies Fund (the "Fund"), which has filed and had declared effective by the Commission a shelf registration statement on Form N-2 ("Registration Statement"), ifthe Fund files a post-effective amendment to its Registration Statement pursuant to Rule 486(b) under the Securities Act, under the circumstances set forth in your letter. Background You state that the Fund is a closed-end management investment company registered under the Investment Company Act of 1940 (the "Investment Company Act"). The Fund filed and had declared effective by the Commission its Registration Statement pursuant to which it may issue common shares on a delayed or continuous basis in accordance with Rule 415(a)(1)(x) under the Securities Act and the positions of the Commission staff. 1 NexPoint Advisors, L.P. serves as the investment adviser to the Fund. The Fund's common shares are registered under
Section 12(b) of the Securities Exchange Act of 1934 and are listed and traded on the New York
Stock Exchange. The Fund has a fiscal year ending on December 31.
You state that the Fund's board of trustees (the "Board"), including a majority of independent trustees, has concluded that a continuously effective shelf registration statement would be beneficial to the Fund, its stockholders and potential investors. You state that the Fund believes that it might be unable to sell securities off its effective registration statement for significant portions of each year due to the need to file a post-effective amendment pursuant to
Section 8(c) ofthe Securities Act ("Post-Effective Amendment") to bring the Fund's financial
statements up to date. You further state that the Fund, its stockholders and potential investors would benefit if Post-Effective Amendments filed for the purpose of bringing the Fund's financial statements up to date or to make any other non-material changes were effective immediately, as permitted by Rule 486(b) under the Securities Act available to certain registered closed-end investment companies. You state that utilization of Rule 486(b) would help ensure that the Fund has the ability to raise capital without significant periods of disruption to such offering process, and could reduce expenses incurred by the Fund in the Post-Effective Amendment process. You further state that due to the limited purpose for which the Fund would use Rule 486(b ), no erosion of investor protection would occur and investors could have faster access to important information about the Fund, including its updated financial information. See Nuveen Virginia Premium Income Municipal Fund, SEC StaffNo-Action Letter (Oct. 6, 2006); Pilgrim America Prime Rate Trust, SEC StaffNo-Action Letter (May I, 1998) ("Pilgrim Letter").