SEC Proposes Offering Reforms for Business Development Companies and Registered Closed-End Funds

The Securities and Exchange Commission today voted to propose rule amendments to implement certain provisions of the Small Business Credit Availability Act and the Economic Growth, Regulatory Relief, and Consumer Protection Act. The proposal would improve access to capital and facilitate investor communications by business development companies and registered closed-end funds. Business development companies—or “BDCs”—are a type of closed-end fund established by Congress that primarily invest in small and developing companies. The proposed amendments would modify the registration, communications, and offering processes available to BDCs and registered closed-end funds, building on offering practices that operating companies currently use. “This congressional mandate recognizes the importance of an efficient and cost-effective approach for these funds to raise capital in our public markets, which should ultimately benefit investors in these funds, including Main Street investors,” said SEC Chairman Jay Clayton.