SEC adopts offering reforms for BDCs and registered closed-end funds and issues a temporary exemptive order

Abstract

Purpose

To analyze and identify the key findings from the April 8, 2020, U.S. Securities and Exchange Commission’s (the “SEC”) recently approved rule amendments (“Adopted Rules”) extended to business development companies (“BDCs”) and registered closed-end funds and an Exemptive Order providing regulatory flexibility to BDCs.

Design/methodology/approach

Discusses the key takeaways and implications from the Adopted Rules and Exemptive Order.

Findings

The Adopted Rules provide BDCs and registered closed-end funds some of the more efficient registration, reporting, offering, and communication requirements currently applicable to operating companies. The Exemptive Order provides BDCs additional flexibility with respect to (1) the issuance and sale of senior securities and (2) the participation in certain joint transactions.

Practical implications

Firms and their representatives should heed the trends in both the substantial restitution FINRA is ordering and the related enforcement issues in the cases FINRA has brought.

Originality/value

Expert analysis and guidance from experienced asset management lawyers.

Citation

Rosella, M., Hearth, D., Avdeychik, V. and Johnson, R. (2021), "SEC adopts offering reforms for BDCs and registered closed-end funds and issues a temporary exemptive order", Journal of Investment Compliance, Vol. 22 No. 1, pp. 40-46. https://doi.org/10.1108/JOIC-10-2020-0031