The Securities and Exchange Commission proposed rule amendments that are intended to modernize the offering related provisions of the Securities Act and the communications safe harbors available to business development companies (BDCs) and closed-end funds (CEFs) in order to bring these to parity with the provisions applicable to operating companies. The Commission was required to undertake rulemaking with respect to BDCs by the Small Business Credit Availability Act. (See our chart that summarizes the affected provisions: https://www.freewritings.law/wp-content/uploads/sites/24/2018/04/BDC-provisions-of-2018-Spending-Bill_.pdf.) The Commission was required to undertake rulemaking along the same lines in respect of CEFs by the Crapo Act.

Among the most important proposed changes for BDCs and CEFs would be the ability to qualify as well-known seasoned issuers (WKSIs) to the extent that the entities meet the reporting history and float requirements; benefit as WKSIs from the ability to engage in certain communications and rely on expedited shelf registration provisions, the ability for other BDCs and CEFs to use more streamlined shelf registration statement procedures, and the ability to rely on a number of important communications safe harbors.

A detailed client alert will follow.