The Securities and Exchange Commission voted to adopt rule amendments that will allow business development companies and other closed-end funds to benefit from the securities offering rules that are already available to operating companies.
The reforms will enable eligible funds to engage in the same “streamlined” registration process that has long been available to operating companies, including modernized communications and prospectus delivery procedures and requirements, the SEC said Wednesday.
The amendments were designed to “reduce regulatory costs and facilitate capital formation, particularly for small and mid-sized businesses, while modernizing disclosures to streamline the way in which funds provide valuable information to investors,” according to the SEC.
As a result of the reforms, most of which will become effective Aug. 1, BDCs and other closed-end funds will be better able to respond to market opportunities, the SEC said. Also included are disclosure requirements and new structured data requirements that will make it easier for investors and others to analyze fund data.