Next Steps for Credit Availability Act

Summary: Next Steps for Credit Availability Act - Amends the Investment Company Act of 1940 to allow a business development company (BDC) to own or acquire securities or other interests in the business of a registered investment adviser or adviser to an investment company. Reduces from 200% to 150% the asset coverage requirements applicable to BDCs. Allows a BDC to issue stock. Directs the Securities and Exchange Commission (SEC) to revise various rules under the Securities Act of 1933 and to revise forms as necessary to allow a BDC to use security offering rules available to other issuers that are required to file security issuance reports under the Securities Exchange Act of 1934.

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Next Steps for Credit Availability 
Act''.

SEC. 2. AMENDMENTS TO PERMIT BUSINESS DEVELOPMENT COMPANIES TO OWN 
              INVESTMENT ADVISERS.

    Section 60 of the Investment Company Act of 1940 (15 U.S.C. 80a-59) 
is amended by striking ``except that the Commission shall not'' and 
inserting the following:
        ``except that--
            ``(1) section 12 shall not apply to the purchasing, 
        otherwise acquiring, or holding by a business development 
        company of any security issued by, or any other interest in the 
        business of, any person who is an investment adviser registered 
        under title II of this Act or who is an investment adviser to 
        an investment company; and
            ``(2) the Commission shall not''.

SEC. 3. AMENDMENTS TO EXPAND ACCESS TO CAPITAL FOR BUSINESS DEVELOPMENT 
              COMPANIES.

    Section 61(a) of the Investment Company Act of 1940 (15 U.S.C. 80a-
60(a)) is amended--
            (1) in paragraph (1), by striking ``200'' and inserting 
        ``150'';
            (2) in paragraph (2), by inserting ``or which is a stock'' 
        after ``indebtedness''; and
            (3) by inserting after paragraph (4) the following new 
        paragraph:
            ``(5) Section 18(a)(2) shall not apply to a business 
        development company.''.

SEC. 4. PARITY FOR BUSINESS DEVELOPMENT COMPANIES REGARDING OFFERING 
              RULES.

    (a) Revision to Rules.--Not later than 180 days after the date of 
enactment of this Act, the Securities and Exchange Commission shall 
revise any rules (or any successor rules) to the extent necessary to 
allow a business development company that has filed an election 
pursuant to section 54 of the Investment Company Act of 1940 (15 U.S.C. 
80a-60(a)) to use the securities offering rules that are available to 
other issuers that are required to file reports under section 13 or 
section 15(d) of the Securities Exchange Act of 1934 (Public Law 73-
404; 48 Stat. 881). Any action that the Commission takes pursuant to 
this subsection shall include the following:
            (1) The Commission shall revise rule 405 under the 
        Securities Act of 1933 (17 C.F.R. 230.405)--
                    (A) to remove the exclusion of a business 
                development company from the definition of a well-known 
                seasoned issuer provided by that rule; and
                    (B) to add registration statements filed on Form N-
                2 to the definition of ``automatic shelf registration 
                statement'' provided by that rule.
            (2) The Commission shall revise rules 168 and 169 under the 
        Securities Act of 1933 (17 C.F.R. 230.168 and 230.169) to 
        remove the exclusion of a business development company from an 
        issuer that can use the exemptions provided by those rules.
            (3) The Commission shall revise rules 163 and 163A under 
        the Securities Act of 1933 (17 C.F.R. 230.163 and 230.163A) to 
        remove a business development company from the list of issuers 
        that are ineligible to use the exemptions provided by those 
        rules.
            (4) The Commission shall revise rule 134 under the 
        Securities Act of 1933 (17 C.F.R. 230.134) to remove the 
        exclusion of a business development company from that rule.
            (5) The Commission shall revise rules 138 and 139 under the 
        Securities Act of 1933 (17 C.F.R. 230.138 and 230.139) to 
        specifically include a business development company as an 
        issuer to which those rules apply.
            (6) The Commission shall revise rule 164 under the 
        Securities Act of 1933 (17 C.F.R. 230.164) to remove a business 
        development company from the list of issuers that are excluded 
        from that rule.
            (7) The Commission shall revise rule 433 under the 
        Securities Act of 1933 (17 C.F.R. 230.433) to specifically 
        include a business development company that is a well-known 
        seasoned issuer as an issuer to which that rule applies.
            (8) The Commission shall revise rule 415 under the 
        Securities Act of 1933 (17 C.F.R. 230.415)--
                    (A) to state that the registration for securities 
                provided by that rule includes securities registered by 
                a business development company on Form N-2; and
                    (B) to provide an exception for a business 
                development company from the requirement that a Form N-
                2 registrant must furnish the undertakings required by 
                item 34.4 of Form N-2.
            (9) The Commission shall revise rule 497 under the 
        Securities Act of 1933 (17 C.F.R. 230.497) to include a process 
        for a business development company to file a form of prospectus 
        that is parallel to the process for filing a form of prospectus 
        under rule 424(b).
            (10) The Commission shall revise rules 172 and 173 under 
        the Securities Act of 1933 (17 C.F.R. 230.172 and 230.173) to 
        remove the exclusion of an offering of a business development 
        company from those rules.
    (b) Revision to Form N-2.--The Commission shall revise Form N-2--
            (1) to include an item or instruction that is similar to 
        item 12 on Form S-3 to provide that a business development 
        company that meets the requirements of Form S-3 shall 
        incorporate by reference its reports and documents filed under 
        the Securities Exchange Act of 1934 into its registration 
        statement filed on Form N-2; and
            (2) to include an 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 (or any successor 
        form).