SEC Adopts, Reproposes BDC Rules
The SEC last week adopted two new BDC rules under the Investment Company Act.
New Rule 2a-46 defines an "eligible portfolio company" to include all private companies and companies whose securities are not listed on a national securities exchange. New Rule 55a-1 conditionally permits a BDC to include in its 70 percent basket follow-on investments in a company that met the new definition of eligible portfolio company at the time of the BDCís initial investment in it, but no longer meets that definition.
The Commission also reproposed Rule 2a-46(b), which would expand the definition of eligible portfolio company to include certain companies that list their securities on a national securities exchange. The SEC is seeking comment on a range of possible alternative ceilings for publicly-traded eligible portfolio companies.