Sec. 437. Expanding access to capital for business development companies
814 words·~4 min read·
/bill/115/hr/10/ih/section-437A research copy — for the controlling text, always check the official state or federal source. Not legal advice.
Section 61(a) of the Investment Company Act of 1940 ( 15 U.S.C. 80a–60(a) ) is amended— by redesignating paragraphs
(2)through
(4)as paragraphs
(3)through (5), respectively; by striking paragraph
(1)and inserting the following: Except as provided in paragraph (2), the asset coverage requirements of subparagraphs
(A)and
(B)of section 18(a)(1) (and any related rule promulgated under this Act) applicable to business development companies shall be 200 percent. The asset coverage requirements of subparagraphs
(A)and
(B)of section 18(a)(1) and of subparagraphs
(A)and
(B)of section 18(a)(2) (and any related rule promulgated under this Act) applicable to a business development company shall be 150 percent if— within five business days of the approval of the adoption of the asset coverage requirements described in clause (ii), the business development company discloses such approval and the date of its effectiveness in a Form 8-K filed with the Commission and in a notice on its website and discloses in its periodic filings made under section 13 of the Securities and Exchange Act of 1934 ( 15 U.S.C. 78m )— the aggregate value of the senior securities issued by such company and the asset coverage percentage as of the date of such company’s most recent financial statements; and that such company has adopted the asset coverage requirements of this subparagraph and the effective date of such requirements; with respect to a business development company that issues equity securities that are registered on a national securities exchange, the periodic filings of the company under section 13(a) of the Securities Exchange Act of 1934 ( 15 U.S.C. 78m ) include disclosures reasonably designed to ensure that shareholders are informed of— the amount of indebtedness and asset coverage ratio of the company, determined as of the date of the financial statements of the company dated on or most recently before the date of such filing; and the principal risk factors associated with such indebtedness, to the extent such risk is incurred by the company; and the application of this paragraph to the company is approved by the required majority (as defined in section 57(o)) of the directors of or general partners of such company who are not interested persons of the business development company, which application shall become effective on the date that is 1 year after the date of the approval, and, with respect to a business development company that issues equity securities that are not registered on a national securities exchange, the company extends, to each person who is a shareholder as of the date of the approval, an offer to repurchase the equity securities held by such person as of such approval date, with 25 percent of such securities to be repurchased in each of the four quarters following such approval date; or the company obtains, at a special or annual meeting of shareholders or partners at which a quorum is present, the approval of more than 50 percent of the votes cast of the application of this paragraph to the company, which application shall become effective on the date immediately after the date of the approval. ; in paragraph
(3)(as redesignated), by inserting or which is a stock after indebtedness ; in subparagraph
(A)of paragraph
(4)(as redesignated)— in the matter preceding clause (i), by striking voting ; and by amending clause
(iii)to read as follows: the exercise or conversion price at the date of issuance of such warrants, options, or rights is not less than— the market value of the securities issuable upon the exercise of such warrants, options, or rights at the date of issuance of such warrants, options, or rights; or if no such market value exists, the net asset value of the securities issuable upon the exercise of such warrants, options, or rights at the date of issuance of such warrants, options, or rights; and ; and by adding at the end the following: Except as provided in subparagraph (B), the following shall not apply to a business development company: Subparagraphs
(C)and
(D)of section 18(a)(2). Subparagraph
(E)of section 18(a)(2), to the extent such subparagraph requires any priority over any other class of stock as to distribution of assets upon liquidation. With respect to a senior security which is a stock, subsections
(c)and
(i)of section 18. Subparagraph
(A)shall not apply with respect to preferred stock issued to a person who is not known by the company to be a qualified institutional buyer (as defined in section 3(a) of the Securities Exchange Act of 1934). . The Investment Company Act of 1940 ( 15 U.S.C. 80a–1 et seq.) is amended— in section 57— in subsection (j)(1), by striking section 61(a)(3)(B) and inserting section 61(a)(4)(B) ; and in subsection (n)(2), by striking section 61(a)(3)(B) and inserting section 61(a)(4)(B) ; and in section 63(3), by striking section 61(a)(3) and inserting section 61(a)(4) .
Connectionstraces to 1
Traces to 1 document
U.S. Code
2 references not yet in our index
- 15 USC 80a–60(a)
- 15 USC 80a–1
Citation graph
cites case law
Sec. 437
Expanding access to capital for business development companies
Cite15 USC 80a–60(a)
Cite15 USC 80a–1
Cites 3Cited by 0 across 0 sources