[Congressional Record Volume 164, Number 40 (Wednesday, March 7, 2018)]
[Senate]
[Pages S1463-S1464]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
SA 2074. Mr. HELLER (for himself and Mr. Manchin) submitted an
amendment intended to be proposed by him to the bill S. 2155, to
promote economic growth, provide tailored regulatory relief, and
enhance consumer protections, and for other purposes; which was ordered
to lie on the table; as follows:
At the appropriate place, insert the following:
SEC. ___. BUSINESS DEVELOPMENT COMPANIES.
(a) Expanding Access to Capital for Business Development
Companies.--
(1) In general.--Section 61(a) of the Investment Company
Act of 1940 (15 U.S.C. 80a-60(a)) is amended--
(A) by redesignating paragraphs (2) through (4) as
paragraphs (3) through (5), respectively; and
(B) by striking paragraph (1) and inserting the following:
``(1) 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.
``(2) 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--
``(A) not later than 5 business days after the date on
which those asset coverage requirements are approved under
subparagraph (D) of this paragraph, the business development
company discloses that the requirements were approved, and
the effective date of the approval, in--
``(i) any filing submitted to the Commission under section
13(a) or 15(d) of the Securities Exchange Act of 1934 (15
U.S.C. 78m(a); 78o(d)); and
``(ii) a notice on the website of the business development
company;
``(B) the business development company discloses, in each
periodic filing required under section 13(a) of the
Securities Exchange Act of 1934 (15 U.S.C. 78m(a))--
``(i) the aggregate outstanding principal amount or
liquidation preference, as applicable, of the senior
securities issued by the business development company and the
asset coverage percentage as of the date of the business
development company's most recent financial statements
included in that filing;
``(ii) that the business development company, under
subparagraph (D), has approved the asset coverage
requirements under this paragraph; and
``(iii) the effective date of the approval described in
clause (ii);
``(C) with respect to a business development company that
is an issuer of common equity securities, each periodic
filing of the company required under section 13(a) of the
Securities Exchange Act of 1934 (15 U.S.C. 78m(a)) includes
disclosures that are reasonably designed to ensure that
shareholders are informed of--
``(i) the amount of senior securities (and the associated
asset coverage ratios) of the company, determined as of the
date of the most recent financial statements of the company
included in that filing; and
``(ii) the principal risk factors associated with the
senior securities described in clause (i), to the extent that
risk is incurred by the company; and
``(D) the company--
``(i)(I) through a vote of the required majority (as
defined in section 57(o)), approves the application of this
paragraph to the company, to become effective on the date
that is 1 year after the date of the approval; or
``(II) 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 for the
application of this paragraph to the company, to become
effective on the first day after the date of the approval;
and
``(ii) if the company is not an issuer of common equity
securities that are listed on a national securities exchange,
extends, to each person that is a shareholder as of the date
of an approval described in subclause (I) or (II) of clause
(i), as applicable, the opportunity (which may include a
tender offer) to sell the securities held by that shareholder
as of that applicable approval date, with 25 percent of those
securities to be repurchased in each of the 4 calendar
quarters following the calendar quarter in which that
applicable approval date takes place.''.
(2) Conforming amendments.--
(A) Investment advisers act of 1940.--Section 205(b)(3) of
the Investment Advisers Act of 1940 (15 U.S.C. 80b-5(b)(3))
is amended--
(i) by striking ``section 61(a)(3)(B)(iii)'' and inserting
``section 61(a)(4)(B)(iii)''; and
(ii) by striking ``section 61(a)(3)(B)'' and inserting
``section 61(a)(4)(B)''.
(B) Investment company act of 1940.--The Investment Company
Act of 1940 (15 U.S.C. 80a-1 et seq.) is amended--
(i) in section 57 (15 U.S.C. 80a-56)--
(I) in subsection (j)(1), by striking ``section
61(a)(3)(B)'' and inserting ``section 61(a)(4)(B)''; and
(II) in subsection (n)(2), by striking ``section
61(a)(3)(B)'' and inserting ``section 61(a)(4)(B)''; and
(ii) in section 63(3) (15 U.S.C. 80a-62(3)), by striking
``section 61(a)(3)'' and inserting ``section 61(a)(4)''.
(b) Parity for Business Development Companies Regarding
Offering and Proxy Rules.--
(1) Definitions.--In this subsection--
(A) the term ``business development company'' has the
meaning given the term in section 2(a) of the Investment
Company Act of 1940 (15 U.S.C. 80a-2(a));
(B) the term ``Commission'' means the Securities and
Exchange Commission;
(C) the term ``Form N-2'' means the form described in
section 239.14 of title 17, Code of Federal Regulations;
(D) the term ``Form S-3'' means the form described in
section 239.13 of title 17, Code of Federal Regulations; and
(E) the term ``Schedule 14A'' means the information
required under section 240.14a-101 of title 17, Code of
Federal Regulations.
(2) Revision to rules.--
(A) In general.--Not later than 1 year after the date of
enactment of this Act, the Commission shall make the
revisions described in subparagraph (B) to allow a business
development company that has filed an election under section
54 of the Investment Company Act of 1940 (15 U.S.C. 80a-53)
to use the securities offering and proxy rules that are
available to other issuers that are required to file reports
under section 13(a) or section 15(d) of the Securities
Exchange Act of 1934 (15 U.S.C. 78m(a); 78o(d)).
(B) Required revisions.--The revisions described in this
subparagraph are revisions to--
(i) section 230.405 of title 17, Code of Federal
Regulations--
(I) to remove the exclusion of a business development
company from the definition of the term ``well-known seasoned
issuer'' under that section; and
(II) to add a registration statement filed on Form N-2 to
the definition of the term ``automatic shelf registration
statement'' under that section;
(ii) sections 230.168 and 230.169 of title 17, Code of
Federal Regulations, to remove the exclusion of a business
development company from an issuer that is eligible for the
exemptions under those sections;
(iii) section 230.163 of title 17, Code of Federal
Regulations, to remove a business development company from
the list of issuers that are ineligible for the exemption
under that section;
(iv) section 230.163A of title 17, Code of Federal
Regulations, to remove the communications made by a business
development company from the list of communications that are
ineligible for the exemption under that section;
(v) section 230.134 of title 17, Code of Federal
Regulations, to remove the exclusion of a communication
relating to a business development company from the
application of that section;
(vi) sections 230.138 and 230.139 of title 17, Code of
Federal Regulations, to specifically include a business
development company as an issuer to which those sections
apply;
(vii) section 230.156 of title 17, Code of Federal
Regulations, to provide that nothing in that section may be
construed to prevent a business development company from
qualifying for an exemption under section 230.168
[[Page S1464]]
or 230.169 of title 17, Code of Federal Regulations, as
amended by the Commission in accordance with the requirements
of this subsection;
(viii) section 230.164 of title 17, Code of Federal
Regulations, to remove a business development company from
the list of issuers that are excluded under that section;
(ix) section 230.433 of title 17, Code of Federal
Regulations, to specifically include a business development
company that is a well-known seasoned issuer as an issuer to
which that section applies;
(x) section 230.415 of title 17, Code of Federal
Regulations to state that the registration for securities
under section 230.415(a)(1)(x) of title 17, Code of Federal
Regulations, includes securities registered on Form N-2 by a
business development company that would otherwise meet the
eligibility requirements of Form S-3;
(xi) section 230.497 of title 17, Code of Federal
Regulations, to include a process for a business development
company to file a form of prospectus in the same manner as
the process for filing a form of prospectus under section
230.424(b) of title 17, Code of Federal Regulations;
(xii) sections 230.172 and 230.173 of title 17, Code of
Federal Regulations, to remove the exclusion of an offering
of a business development company from the application of
those sections;
(xiii) section 230.418 of title 17, Code of Federal
Regulations, to provide that a business development company
that would otherwise meet the eligibility requirements of
Form S-3 shall be exempt from paragraph (a)(3) of that
section;
(xiv) Schedule 14A to revise item 13(b)(1) of that Schedule
to include a business development company that would
otherwise meet the requirements of note E of that Schedule as
an issuer to which that item applies;
(xv) section 243.103 of title 17, Code of Federal
Regulations, to provide that paragraph (a) of that section
applies for the purposes of Form N-2; and
(xvi) item 34 on Form N-2 to require a business development
company to provide undertakings that are no more restrictive
than the undertakings that are required of a registrant under
section 229.512 of title 17, Code of Federal Regulations.
(3) Revision to form n-2.--Not later than 1 year after the
date of enactment of this Act, the Commission shall revise
Form N-2--
(A) to include an item or instruction that is similar to
item 12 on Form S-3 to provide that a business development
company that would otherwise meet the requirements of Form S-
3 shall incorporate by reference the reports and documents
filed by the business development company under the
Securities Exchange Act of 1934 (15 U.S.C. 78a et seq.) into
the registration statement of the business development
company filed on Form N-2; and
(B) to include an item or instruction that is similar to
the instruction regarding automatic shelf offerings by well-
known seasoned issuers on Form S-3 to provide that a business
development company that is a well-known seasoned issuer may
file automatic shelf offerings on Form N-2.
(4) Treatment if revisions not completed in timely
manner.--If the Commission fails to complete the revisions
required under paragraphs (2) and (3) by the dates described
in those paragraphs, a business development company, during
the period beginning on the date that is 1 day after 1 year
after the date of enactment of this Act and ending on the
date that the Commission completes those revisions, may deem
those revisions to have been completed in accordance with the
actions required to be taken by the Commission under those
paragraphs.
(5) Rules of construction.--
(A) Treatment of successor regulations and forms.--Any
reference in this subsection to a regulation or form shall be
construed as a reference to--
(i) that regulation or form, as in effect on the day before
the date of enactment of this Act; or
(ii) any successor to that regulation or form.
(B) Distribution of sales material.--Nothing in this
subsection, or in the amendments made pursuant to the
requirements of this subsection, may be construed to prevent
a business development company from distributing sales
material under section 230.482 of title 17, Code of Federal
Regulations.
______