United States

Closed-end investment companies: Proposed securities offering reform


On March 20, 2019, the SEC issued a proposed rule, Securities Offering Reform for Closed-End Investment Companies, which, if finalized, would modify the registration, communications and offering processes for business development companies and other closed-end investment companies under the Securities Act of 1933. The proposed rules would allow these investment companies to use the securities offering rules that already are available to operating companies. As such, the proposed rules would extend to closed-end investment companies offering reforms currently available to operating company issuers by:

  • Expanding the definition of “well-known seasoned issuer” to allow these investment companies to qualify
  • Streamlining the registration process for these investment companies, including the process for shelf registration
  • Permitting these investment companies to satisfy their final prospectus delivery requirements by filing the prospectus with the SEC
  • Permitting additional communications by and about these investment companies during a registered public offering

In addition, among many other provisions, the proposed rules include amendments to rules and forms intended to tailor the disclosure and regulatory framework to these investment companies.

The proposed rule is available for comments for 60 days after it is published in the Federal Register.