As investors seek yield from nontraditional investments, regulators are looking for more information on such products.
On Thursday, the Financial Industry Regulatory Authority said it is investigating sales of nontraded business development companies, or BDCs.
FINRA posted an exam letter asking FINRA members for a list of the BDCs they offer, the names of advisors selling them and the firms’ procedures for selecting BDCs to sell.
BDCs typically invest in smaller companies and are more accessible than private equity or venture capital funds.
Specifically, FINRA is asking that BDC-related documents and information from January 2015 through June 2016 be sent to it by Sept. 9.