On March 20, 2019, the SEC proposed a series of reforms to the registration and offering processes for registered closedend investment companies (Registered CEFs). The proposal responds to the SEC’s congressional mandate to extend offering reforms currently available to operating companies to Registered CEFs. The proposal includes a number of rule and form amendments that would result in greater consistency between the treatment of Registered CEFs and operating companies with respect to the registration, communication and offering processes under the Securities Act of 1933. 

If adopted, the proposal would:

  •  Streamline the shelf registration process to allow Registered CEFs to raise additional capital more quickly and efficiently;
  •  Allow eligible Registered CEFs to qualify as “well known seasoned issuers” (WKSIs) and thereby make use of streamlined registration, communication and offering processes comparable to those currently available to operating company WKSIs;
  •  Adopt a number of changes to Registered CEFs’ ongoing reporting requirements, including a new requirement to file current reports on Form 8-K; and
  •  Provide Registered CEFs with greater flexibility to communicate with investors in connection with securities offerings both before and after filing a registration statement. 

A detailed summary of the proposal is available at: https://www.vedderprice.com/sec-proposes-closed-end-fundoffering-reform