I 113th CONGRESS 1st Session H. R. 1800 IN THE HOUSE OF REPRESENTATIVES April 26, 2013 Mr. Grimm (for himself and Mr. Graves of Georgia ) introduced the following bill; which was referred to the Committee on Financial Services A BILL To amend the Investment Company Act of 1940 to allow business development companies to purchase, otherwise acquire, or hold certain securities, to change the asset coverage ratio and treatment of preferred stock for business development companies, and to direct the Securities and Exchange Commission to revise certain rules relating to business development companies.

1. Short title This Act may be cited as the Small Business Credit Availability Act . 2. Amendment 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 . 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 adding at the end the following: (5) Section 18(a)(2) shall not apply to a business development company. . 4. Parity for business development companies regarding offering and proxy 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 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–53) to use the securities offering and proxy 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 ( 15 U.S.C. 78m ; 78o(d)). 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. (11) The Commission shall revise rule 418 under the Securities Act of 1933 (17 C.F.R. 230.418) to provide that a business development company that would otherwise meet the eligibility requirements of General Instruction I.A of Form S–3 shall be exempt from paragraph (a)(3) of that rule. (12) The Commission shall revise rule 14a–101 under the Securities Exchange Act of 1934 (17 C.F.R. 240.14a–101) to provide that a business development company that would otherwise meet the requirements of General Instruction I.A of Form S–3 shall be deemed to meet the requirements of Form S–3 for purposes of Schedule 14A. (13) The Commission shall revise rule 103 under Regulation FD (17 C.F.R. 243.103) to provide that paragraph (a) of that rule applies for purposes of Form N–2. (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 would otherwise meet 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. (c) Rule of construction Any reference in this section to a rule or form means such rule or form or any successor rule or form.