SecProbe.io

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C.20S49
DIVISION OF
INVESTMENT MANAGEMENT
Renee M. Hardt, Esq.
Vedder Price P.C.
222 N. LaSalle Street
Chicago, IL 60601
Re: RiverNorth Tactical Opportunties Fund, Inc. (the "Fund")
File Numbers 811-22472 & 333-169317
Dear Ms. Hardt:
The Fund filed a registration statement on Form N-2 under the Securties Act of
1933 ("Securities Act") and the Investment Company Act of 1940 ("1940 Act") for the
purpose of registerng shares of common stock. The Fund will pursue a tactical asset
allocation strategy and opportstically invest under normal circumstances in underlyig
fuds. Underlying fuds may include closed-end and exchange-traded fuds, open-end
funds, exchange-traded notes and business development companes. We wil review the
Fund's financial statements and other information submitted in subsequent amendients
and may have comments regarding that information.
Our comments regarding the filing are set fort below.
General
1. Please see the U.S. Securties and Exchange Commssion, A Plain English
Handbook (1998). Please review and revise the disclosure where it appears necessar so
as to assure conformity with the Commission's plain English requirements. For example:
i) explain the underlined ter in the following sentence: "In addition, as
a result of the imbedded derivative featues, strctued notes generally are subject
to more risk than investing in a simple note or bond issued by the same Îssuet'(Emphasis added.), and- - i'.' _
ii) correct or explain the underlined ter in the following sentence: "The
purchaser of a put or call option rus the risk oflosing the purchaser'sentite
investment, paid as the premium, in a relatively short period of time if the option
is not "covered" at a gain or canot be exercised at a gain prior to expiration."
(Emphasis added.)
Lo: Compu'crlRvmiiRPRPBFhlO2820lORPRP
12161010-:08:07 PM

. ,-",-, -,-_..
2. We remind all registrants of the obligation to file electronic reports with~esp¿ct to'"
their fidelity bond coverage under Rule 17 g-l (g) under the 1940 Act.
3. As appropriate, add disclo'sure regarding the recent market tuoiL. In light of the
Fund's global investments, the disclosure should refer as well to the curent uncertainty
regarding certain European countres.
4. Please state in your response letter whether FIN wil or has reviewed the
proposed underwriting terms and arangements of the transaction involved in the
registration statement. In ths connection, indicate whether FINRA has reviewed the
payments by the adviser, or an affiliate, of marketing and strctug fees as discussed
under the caption "Underwriters." Indicate also whether FINRA aggregated such
payments with the sales load or other fees for puroses of determinng compliance with
FINRA guidelines on underwriter compensation.
5. In light of disclosure under the captions "Investment Objectives, Strategies and
Policies" and "Risks" regarding the Fund's contemplated investments in dervative
instrents, confirm that the Fund's derivatives disclosure reflects the observatiollset
forth in the recent letter from Bar Miler, Associated Director in the Division of"
Investment Management to the Investment Company Institute. See. letter to Ka.e
McMilan, Esq., General Counsel, Investment Company Institute, Dervatives-Related
Disclosures by Investment Companes (July 30,2010).
6. The fee table on the facing page discloses the amount of shares being registeréd.
Confirm that shares to be used to fulfill over-allotments are included in the shares 'being
registered.
Prospectus Cover
7. Revise the pricing table to disclose the amount of the offerig expenses Ôfth~
offering in a footnote. See. Instrction 6 to Item l.g. of Form N-2.
8. Revise the prominent statement appearng at the bottom of the page, the substaìce
of which is required by Rule 481 (b)(1) under the 1940 Act, to reflect the changes brought
about by the National Securties Markets Improvement Act of 1996.
Prospectus
9. Disclosure on the page following the cover and in many other placesinth~filing
indicates that the Fund wil normally invest in underlyig fuds, includingclosed-"ênd
and exchange traded funds, open-end fuds, business development companes åidi;
exchange-traded notes. What provision of the 1940 Act does the Fund rely on to make
such substantial investments in investment company securties? In ths connection,we
" -' ,- .,:~~'--'._.;.
Lo: ComputcrlRvanortRPRPBFh 10282010RPRP
12161010-:08:07 PM

are aware of the disclosure on ths topic captioned "Prospectus Sumar- Risk
Considerations - Investment-Related Risks - Underlyig Fund Risks."
10. If the Fund may invest in unegistered fuds, such as hedge fuds or fuds that do
not fall under the definition of investment company by virte of §3( c)(1) or §3( c )(7) of
the 1940 Act, add appropriate strategy and risk disclosure. Unless they are issued by
other fuds, explain to the staff why exchange-traded notes are included with the
definition of underlying fuds.
11. Disclosure later on the same page discusses the use ofleverage. The last sentence
of that disclosure states that: "Any use ofleverage would create a greater risk ofloss for
the shares of common stock than ifleverage is not used." Add disclosure indicating that
holders of common shares pay all the expenses related to the issuance of debt or use of
leverage.
12. Revise the discussion captioned "Cautionar Notice Regarding Forward-Looking
Statements" so as to clarfy that any forward-looking statements contaned in the
prospectus or SAI does not meet the safe harbor for forward-looking statements pursuant
to §27 A ofthe Securties Act.
13. The third and fourh sentences of the disclosure captioned "Prospectus Sunar
- Principal Investment Strategies" indicates that normally the Fund's asset allocatioÌi wil
be implemented by opportstically investing in closed-end and exchange traded :tds
and by investing in open-end, exchange traded notes and business development
companes. Clarfy whether ths means that under ordinar market conditions, the Fund
wil not invest in open-end fuds and ETFs.
14. Delete the phrases "such as" and "include, but are not limited to" from the sixth
and seventh sentences in ths paragraph, and disclose all materal investments.
15. The next paragraph discusses how closed-end fud investments are selected.'
Disclose how open-end and other underlying fud investments are selected:
16. Add disclosure indicating that, to the extent that the Fund invests in the common
stock of underlying fuds, including BDCs and ETFs, the Fund, and therefore you, the
shareholders, wil indirectly bear the expenses of the underlyig fuds.
17. Disclosure under this caption also states that: "Investing in inverse ETFs is similar
to holding various short positions. When the Fund engages in a short sale, it sells a .
securty it does not own and, to complete the sale, borrows the same securty from a
broker or other institution." Revise the disclosure so as to explain the maner in which
inverse ETFs are deemed to be equivalent to short positions.
Lo: Complcr/RivanortRPRPBFbI02820IORPRP
12161010-:08:07 PM

18. Other disclosure under ths caption discusses the Fund's investments in total
retu swaps. There it is said that: "If the underlying asset declines in value over the ter
of the swap, the Fund would be required to pay the dollar value of that decline plus any
applicable fees to the counterary. The Fund may use its own net asset value or that of
an affliated fud or any other reference asset that the Adviser chooses as the underlyig
asset in a total return swap." Disclose the limits, if any, of the adviser's abilty to select
the amount of underlying or reference assets. If none, disclose the potential risk to the
Fund and its shareholders.
19. Revise the disclosure captioned "Prospectus Sumar - Investment Adviser" to
indicates that the adviser is paid more if the Fund leverages and that ths creates a conflct
of interest.
20. Disclosure captioned "Prospectus Sumar - Dividends and Distrbutions"
indicates that at times, to maintain a stable level of distrbutions, the Fund may payout
less than all of its net investment income or payout retu of capitaL. Disclose the
significance of a distrbution consisting of a retu of capita, including a discussion of
the tax aspects as well as the affect on a shareholder's basis in the Fund.
21. A later sub-caption, "Risk Considerations -Investment-Related Risks," states
that: "ARS are debt securities that are sold though dutch auctions." (Emphasisaäded.)
If the Fund wil acquire auction rate preferred securties, change the underlined ter to
something more appropriate.
22. A subsequent sub-caption discusses distressed securties. If accurate, indicate that
these issuers may be insolvent or banpt.
23. Revise the sub-caption "Exchange-Traded Note Risks" so as to indicate, as
disclosed later, that ETNs typically matue 30 years from the date of issue. In addition,
explain the operation of the underlined term in the following sentence: ''Tere'maybe
restrctions on a fund's right to redeem its investment in an ETN . . ." (Emphasisadded.)
24. Similarly, revise the disclosure sub-captioned "Prospectus Sumar - Risk
Considerations - Investment-Related Risks - Foreign Investing Risks" to indicate the
percentage of assets invested in foreign securties, or, alteratively, to indicate that there
are no limits.
25. Disclosure captioned "REIT Risks" discusses changes in the value of equity
REITs versus mortgage REITs. The same disclosure appears in several places in the
filing. Add disclosure that briefly explains these securties and how the two REITs'differ.
26. Add disclosure to the discussion sub-captioned "Prospectus Sumar - Risk
Considerations - Investment':Related Risks - Underlying Fund Risks" indicating that one
fund may be purchasing a securty that another underlying fud is sellng. Confi that
Lo: CompllcrlRvanolRPRPBFlilO2820lORPRP
121612010-:08:07 PM

the Fund wil not invest more than 25% of its assets in underlyig fuds that concentrate
in an industr.
27. Revise the fee table consistent with the following:
i. revise the following line item as indicated: "Expenses borne by common
shareholders of the Fund,"
ii. move the footnotes appearg after "Anual Expenses" so as to follow the
Example, and
iii. the fee table is substantially blan, as is cerai other financial
information elsewhere in the filing. We may have comments regarding that
information upon its inclusion in an amendment to ths registration statement.
Furher, Footnote 2 states that; "The management fee is charged as a percentage
of the Fund's average daily Managed Assets." Explain in the footnote how the amount of
managed assets is converted to net assets for the fee table. Disclose the assumptions used
to calculate the expenses, including the estimated proceeds of the offerig and the ' ,
assumed amount of leverage in the next 12 months. If you assume no leverage, disclose
unequivocally that the Fund wil not leverage in the next 12 months. If the Fund may
leverage, include the costs ofleveragig in the fee table.
28. Disclosure captioned "Investment Objective, Strategies And Policies - Pricipal
Investment Strategies" discusses specific types of investments in which the Fund may
invest, equity securties, including converible securties, and alternative assets. ,pisclose
each type of equity securty in which the Fund intends to invest. If the Fund may acquire
jun convertible securities, indicate that fact. Lastly, explai the tyes of "alteratiye"assets to be acquired by the Fund. ' ,
29. Disclosure in the thrd paragraph states that: "In selecting closed-end fuds, in
paricular, the Adviser opportstically utilzes a combination of short-term and longer-
term trading strategies to seek to derive value from the discount and nremum spreads
associated with closed-end fuds." Explain ths strategy. Wil the Fund putchase.closed-
end fuds that trade at a premium?
30. Disclosure in the four paragraph states that: "Unlike a fud that allocatesits
assets among mutual funds based on the perceived abilty of the advisers tothoseniutual
funds, the Adviser actively manages the Fund's portfolio among the Underlying FÙnds
based on the Adviser's research and analysis of the market and the investment ment of
the Underlying Funds themselves." What does ths mean? For example, sincethê
portfolios of most underlying fuds wil be dynamically changing, how does the Fund
analyze the merits without considering the investment acumen of the underlying fud
adviser?
lAic: CompllcrlRvaonRPRPBFb102820lORPRP
12161010-:08:07 PM

31. The sixth paragraph briefly discusses securties lending and notes that the Flld
wil engage in this activity to increase the retu on the Fund's portfolio. Ifby"retu"
you mean "income," please indicate that in the disclosure. Add disclosure regarding the
regulatory limitations applicable to securties lending, including a statement that the Fund
wil limit its lending to no more than a thrd of its assets. Lastly, indicate that securties
lending involves costs and risks and whether the Fund will invest the collateral tendered
by the pary borrowing the securty.
32. Disclosure in the seventh paragraph discusses total retu swaps and states that:
"Using the Fund's own net asset value as the underlying asset in the total retu swap
serves to reduce cash drag (the impact of cash on the Fund's overall retu) by replacing
it with the impact of market exposure based upon the Fund's own investment holdings."
(Emphasis added.) Explain how ths tye of swap works. Disclose the risk to the Fund
of using the Fund's net asset value as the underlying asset.
33. Disclosure captioned "Use of Leverage" notes that the Fund may borrow to pay
dividends and settle transactions, as well as for investment puroses. Using borrowings
to pay dividends should be consistently disclosed in other discussions in the filing of the
use of leverage.
34. Delete the following sentence from the fift paragraph: "The followigtabfëis
furnished pursuant to SEC requirements." .,',
35. The caption "Risks - Leverage Risks" discloses that: "The use ofleverage
generally wil require the Fund to segregate assets to cover its obligations (or, if the Fund
borrows money or issues preferred shares, to maintain asset coverage in 'conformtY with
the requirements of the 1940 Act). Whle the segregated assets maybe invested in liquid
securities, they may not be used for other operational puroses." Revise the disclosure to
state that the segregated assets wil be liquid. Delete the indicated word from the quoteddisclosure. ., '
36. Revise the sub-caption "Risks - Intial Public Offergs Risks" bydisclosing.
whether the Fund may invest in IPOs of underlying fuds. If it may, there is a sigrficant
risk that the underlying fuds wil trade at a price below the IPO price.
37. Disclosure under the sub-caption "Risks - Options and Futues Risks" states that:
"A fund may purchase and sell call and put options with respect to specific securties, and
may write and sell covered or uncovered call and put options." (Emphasis added.) With
respect to this sentence clarfy the following: i) if the second clause of the sentence, the
underlined clause, relates to options on instrents other than securities, clarfy that
point, and ii) explain whether the Fund wil treat uncovered options as senior secuÎties
subject to §18 of the 1940 Act.
Lo: CompllcrlRvanolRPRPBFhI0282010RPRP
12161010-:08:07 PM

38. Revise the discussion of "REIT Risks" so as to disclose the duplication of fees
and that such fees at the REIT level are not included in the fee table line item reK.~d~gAFFE. '. '
39. Revise the discussion of "Securties Lending Risks" so as to note that such
activity is limited to one thrd of assets and that the Fund must be able to recall loaned
securities to enable it to vote on matters submitted to securty holders.
40. Delete the following sentence from the first paragraph of the disclosure captioned
"Management of the Fund - Portfolio Management:" "Mr. Galley has been