SEC Proposes Offering And Reporting Reform: Key Impacts For BDCs And CEFs

Key Takeaways

• The SEC has proposed two complementary rule proposals that together would represent a significant restructuring of the U.S. securities offering and reporting disclosure framework, with meaningful implications for business development companies (“BDCs”) and registered closed-end funds (“CEFs”).
• Most significantly, one proposal would preempt state securities law registration and qualification requirements for any offering registered under the Securities Act, which would be pivotal for non-traded BDCs that issue securities publicly and currently must comply with multi-state blue sky registration requirements.
• In addition, the proposals would have meaningful impacts on exchange-traded BDCs and CEFs. One proposal would significantly expand access to the short-form shelf registration statement on Form N-2 (“Short-Form N-2”) for exchange-traded BDCs and CEFs by tying Short-Form N-2 eligibility to a new Eligible Listed Issuer (“ELI”) framework, eliminating the US$75