SEC to Consider Rule Change to Improve Access to Capital for SMEs

The Securities and Exchange Commission has scheduled an open meeting for this coming Wednesday (Apri 8, 2020) to consider amendments that may improve the ecosystem to foster access to capital for SMEs.

As we all know, SMEs have been pummeled by the COVID-19 pandemic. Many have a shutdown. For some of these firms, the situation is dire as access to capital is constrained. While Congress, the Department of Treasury and the Executive Branch have worked to create policy to aid these struggling firms (CARES Act), expectations are the situation is challenging.

In recent days, the Commission has heard from the SEC Small Business Capital Formation Committee that indicated things are really bad.

While the exact rule change and amendments are unknown, the SEC Department of Investment Management, led by Dalia Blass, will discuss securities offering reform for closed-end investment companies. To quote the meeting agenda:

“The Commission will consider whether to adopt rule and form amendments that would improve access to capital and facilitate investor communications by business development companies, which primarily invest in small and developing companies, and registered closed-end investment companies. The Commission will consider these amendments, in part, to implement certain provisions of the Small Business Credit Availability Act and the Economic Growth, Regulatory Relief, and Consumer Protection Act. Specifically, the Commission will consider whether to modify the registration, communications, and offering processes for business development companies and other closed-end investment companies under the Securities Act of 1933, as well as related rule and form amendments under the Investment Company Act of 1940 to tailor the disclosure and regulatory framework to these investment companies. The Commission also will consider whether to adopt rule and form amendments to modernize securities registration fee payments for certain registrants.”

The Open Meeting is scheduled to take place at 3 PM ET on April 8th.

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