Company: PDCC
Filing Date: 2025-09-16
Form Type: N-2/A
Source: 0001214659-25-013826
Chunk: 210

Company: Pearl Diver Credit Co Inc.
Filing Date: 2025-09-16
Form: N-2/A
Chunk 210
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 irrespective of whether the OTC derivatives in question are traded bilaterally or cleared. OTC derivatives
dealers are subject to business conduct standards, disclosure requirements, reporting and recordkeeping requirements, transparency requirements,
position limits, limitations on conflicts of interest, and other regulatory burdens. These requirements may increase the overall costs
for OTC derivative dealers, which are likely to be passed along, at least partially, to market participants in the form of higher fees
or less advantageous dealer marks. The full impact of the Dodd-Frank Act on the Company remains uncertain, and it is unclear how the OTC
derivatives markets will ultimately adapt to this new regulatory regime.

Rule 18f-4 under the 1940
Act governs the Company’s use of derivative instruments and certain other transactions that create future payment and/or delivery
obligations by the Company. Rule 18f-4 permits the Company to enter into Derivative Transactions (as defined below) and certain other
transactions notwithstanding the restrictions on the issuance of “senior securities” under Section 18 of the 1940 Act. Section
18 of the 1940 Act prohibits closed-end funds, such as the Company, from issuing or selling any “senior security,” unless
certain asset coverage (and other) requirements are met. In connection with the adoption of Rule 18f-4, the SEC eliminated the asset segregation
framework arising from prior SEC guidance for covering Derivatives Transactions and certain financial instruments.

Under Rule 18f-4, “Derivative
Transactions” include the following: (1) any swap, security-based swap (including a contract for differences), futures contract,
forward contract, option (excluding purchased options), any combination of the foregoing, or any similar instrument, under which the Company
is or may be required to make any payment or delivery of cash or other assets during the life of the instrument or at maturity or early
termination, whether as margin or settlement payment or otherwise; (2) any short sale borrowing; (3) reverse repurchase agreements and
similar financing transactions, if the Company elects to treat these transactions as Derivatives Transactions under Rule 18f-4; and (4)
when-issued or forward-settling securities (e.g., firm and standby commitments, including to-be-announced (“TBA”) commitments,
and dollar rolls) and non-standard settlement cycle securities, unless the Company intends to physically settle the transactions and the
transaction will settle within 35 days of