Proposed Legislation Would Increase Investment Opportunities For Business Development Companies

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7/5/2012

Morrison & Foerster LLP Contact

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The Next Steps for Credit Availability Act (H.R. 5929), introduced by Rep. Michael G. Grimm and Rep. Nydia Velázquez in June 2012, would allow BDCs to invest more of their assets in start-up companies and small-to mid-sized businesses.

Among other things, the bill would:

• Amend the Investment Company Act of 1940 (the “1940 Act”) to permit BDCs to own investment adviser subsidiaries. Currently, the 1940 Act prohibits BDCs from investing in wholly owned subsidiaries that are registered investment advisers.

Please see full alert below for more information.

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Published In: Administrative Law Updates, Business Organization Updates, Election & Politics Law Updates, Finance & Banking Updates, Securities Law Updates

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.