On June 13, the Basel Committee on Banking Supervision (“BCBS”) published its framework for the disclosure of climate-related financial risks. The framework is entirely voluntary and has several notable changes from the 2023 proposal. In this brief Legal Update, we highlight those changes and discuss why the climate disclosure framework will have at best a minor impact in the United States and Europe.
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In recent years, non-bank lending to private equity-owned, small- and middle-market companies has increased significantly. Within this growing sector, private and non-traded BDCs have outperformed other non-bank lenders in many respects. Private and non-traded BDCs have demonstrated notable advantages in terms of portfolio return and quality and investor alignment, and they often benefit from less exposure to the volatility of public markets. Since 2020, assets under management by BDCs has increased from approximately $127 billion to approximately $451 billion in 2025, representing a compounded annual growth rate in excess of 28%. This expansion reflects both growing investor appetite for yield and the increasing confidence in BDCs as viable, long-term sources of capital for middle-market borrowers.
Access our updated BDC Facts & Stats, which provides a compendium of information regarding BDCs, including BDCs that have increased their use of leverage, the terms of BDC advisory agreements, and more.
Read more here.
The Securities and Exchange Commission (SEC) formally withdrew the following proposed Gensler era rulemakings:
Under then Chair Gensler, the SEC proposed what amounted to an overhaul of equity market structure, which, the Chair had argued were intended to promote transparency and competition and to modernize the markets. However, opponents of the measures, which were rolled out in fairly rapid succession, contended that these were unnecessary and had been announced without sufficient analysis and consideration of their potential effects and how these various proposals and changes would interrelate with one another.
It is unclear whether or how the SEC will move forward with regard to any market structure modernization initiatives.
See the withdrawal notice here, https://www.sec.gov/files/rules/final/2025/33-11377.pdf.
In late May 2025, the House Committee on Financial Services (the “Committee”) held a full committee markup, during which the Committee successfully reported 25 bills to the House of Representatives (the “House”). The bills have been introduced and placed on the Union Calendar for consideration by the House. These 25 bills are generally aimed at promoting capital formation. While there were several bills considered and acted on relating to bank regulatory matters, which have as their principal focus tailoring requirements applicable to banks, this is not the subject of this post.
Various measures address early stage capital formation, including angel investors.
H.R. 1190, the Expanding Access to Capital for Rural Job Creators Act, would require the Advocate for Small Business Capital Formation (within the Securities and Exchange Commission (“SEC”)), to issue reports on the difficulties encountered by small businesses in rural areas. Given the importance of rural areas and agricultural development to the economy, this act (if passed) would potentially identify the barriers to financial markets that rural small businesses face.
H.R. 3422, the Promoting Opportunities for Non-Traditional Capital Formation Act, would amend the Exchange Act, requiring the Advocate for Small Business Capital Formation to provide educational resources and host events to promote capital-raising options for underrepresented small businesses and businesses in rural areas.
H.R. 3352, the Helping Angels Lead Our Startups (“HALOS”) Act of 2025, would define “angel investor” for purposes of the federal securities laws. The HALOS Act would also clarify the “general solicitation” definition for purposes of the Securities Act of 1933 (as amended, the “Securities Act”). Under the HALOS Act, startups that engage in “demo days” where products and business plans are discussed, may participate without such discussions being considered securities offerings.
H.R. 3382, the Small Entity Update Act, would direct the SEC to conduct a study, followed by a rulemaking consistent with the results of such study, to define “small entity” under the Regulatory Flexibility Act (the “RFA”). Currently, the RFA requires federal agencies to consider the impact of their regulations on small entities (including small businesses, small governmental units and small non-profit organizations). The RFA mandates that agencies conduct regulatory flexibility analyses, explore less burdensome alternatives and explain their choices, especially when a particular rule is expected to have a significant economic impact on a substantial number of small entities.
Various bills are focused on investor protection, with particular attention to vulnerable investors.
H.R. 1469, the Senior Security Act of 2025, would establish the Senior Investor Taskforce (the “Taskforce”) within the SEC. The Taskforce would issue reports on topics relating to investors over the age of 65, including (but not limited to) industry trends and pertinent issues impacting such investors. This would also enable the Taskforce to take recommendations for legislative and/or regulatory actions that address problems encountered by senior investors. In addition, this act provides that the Government Accountability Office must report on financial exploitation of senior citizens.
H.R. 3357, the Enhancing Multi-Class Share Disclosures Act, would require issuers with a multi-class share structure to make certain disclosures in any proxy or consent solicitation materials.
A number of bills address the definition of “accredited investor.”
H.R. 3339, the Equal Opportunity for All Investors Act of 2025, expands the “accredited investor” definition to include individuals certified through an examination established by the SEC and administered by FINRA.
H.R. 3348, the Accredited Investor Definition Review Act, requires the SEC to review the list of certifications, designations, and credentials for individuals to qualify as an accredited investor and add additional certifications, designations, and credentials that the SEC determines are substantially similar. This bill requires the SEC to repeat this process every five years after the initial assessment.
H.R. 3394, the Fair Investment Opportunities for Professional Experts Act, would expand the “accredited investor” definition to include individuals with certain licenses, qualifying education, or job experience. The qualifying licenses, education, and job experience will be determined by the SEC through rulemaking and verified by the Financial Industry Regulatory Authority or an equivalent self-regulatory organization.
Various bills are intended to encourage more companies to undertake IPOs and also to reduce the burdens associated with remaining a public company.
H.R. 3301 would amend the Exchange Act to specify certain registration statement contents for emerging growth companies (“EGCs”) and permit issuers to file draft registration statements with the SEC for confidential review. The Act updates the EGC financial statement requirements to clarify that an EGC may present two years, rather than three years, of audited financial statements in both IPOs and spin-off transactions. The bill would also allow a spin-off of an EGC to benefit from the two-year financial statement accommodation, which is currently only available during an initial public offering (“IPO”).
H.R. 3343, the Greenlighting Growth Act, establishes that an EGC, as well as any issuer that went public using EGC disclosure obligations, only needs to provide two years of audited financial statements.
H.R. 3323, the Helping Startups Continue To Grow Act provides an extension of certain exemptions and reduced disclosure requirements for companies that were EGCs and continue to meet all other requirements for EGCs except for the five-year restriction. This bill also increases the maximum threshold amounts to qualify as an EGC to $3 billion and removes the disqualification for “large accelerated filers.”
H.R. 3381, the Encouraging Public Offerings Act of 2025 codifies Rule 163B under the Securities Act by allowing an issuer to communicate with potential investors to determine interest in a securities offering, either before or after the filing of a registration statement (i.e. “test the waters” communications). The bill allows for issuers to submit a confidential draft registration statement to the SEC for review prior to public filing. The bill updates the public filing condition to allow any issuer conducting an IPO to file its registration statement publicly 10 days before the effective date of the registration statement.
H.R. 3395, the Middle Market IPO Underwriting Cost Act requires the Comptroller General, in consultation with the SEC and FINRA, to study and report on the costs encountered by small- and medium-sized companies when undertaking IPOs.
H.R. 2225, the Access to Small Business Investor Capital Act, would allow a registered investment company to exclude from the calculation of “acquired fund fees and expenses” those fees and expenses incurred indirectly from investment in a business development company (“BDC”). Given the established policy role of BDCs in promoting investment, this bill could incentivize institutional investors to pursue investments in BDCs.
H.R. 2441, the Improving Disclosure for Investors Act of 2025, would direct the SEC to promulgate rules with respect to the electronic delivery of certain required disclosures to investors. Under the Act, such rules would allow registered investment companies (i.e., mutual funds, closed-end funds, and exchange-traded funds), BDCs, broker-dealers, registered advisers, and any other SEC-regulated entities to meet their obligations under U.S. securities laws to deliver regulatory documents to investors electronically.
In late May 2025, the Securities Industry and Financial Markets Association (SIFMA), together with the American Bankers Association, Bank Policy Institute, Independent Community Bankers of America, and Institute of International Bankers submitted a petition to the Securities and Exchange Commission (SEC) requesting rulemaking to amend its Cybersecurity Risk Management, Strategy, Governance, and Incident Disclosure rule in order to rescind the disclosures mandated thereunder in Item 1.05 of Form 8-K and the corresponding Form 6-K requirements.
The SEC adopted Item 1.05 of Form 8-K on July 26, 2023, which mandated, in part, that public companies disclose a cybersecurity incident that is deemed to be material. Disclosures must include the material aspects of the nature, scope and timing of the cybersecurity incident and any reasonably likely material impact on the company or its financial condition or results of operations.
In the letter, the trade associations request recission of the rule in full due to the fact that, in their view, the rule mandates premature disclosures and has created significant confusion among reporting companies despite attempts at clarification by the SEC through Compliance and Disclosure Interpretations and the comment process. The petition focuses on the following objections to the continued existence of Item 1.05, noting that the rule (i) conflicts with confidential incident reporting requirements applicable to certain reporting entities (e.g., the Department of Homeland Security, Ginnie Mae, etc.), (ii) provides for complex and overly narrow disclosure exceptions, (iii) results in over-reporting in a manner that dilutes materiality and reduces disclosure utility, (iv) is weaponized by ransomware makers and other cybercriminals, (v) has negative implications for insurance and liability, and (vi) has a chilling effect on internal communications and external information sharing.
In place of Item 1.05, the petitioners call for reinstatement of the cybersecurity incident reporting regime in place prior to 2023, where risks relating to such events were treated similarly to other material financial, operational and governance risks by inclusion in registration statements, periodic reports, and current reports upon context-specific determinations made by the registrant. The SEC does not have to respond to the petition, but given interest expressed by new Chair Atkins, it is possible that rollbacks of this and other Gensler-era rules may come to pass. The full text of the petition is available here.
On June 5th, the SEC brought together regulators, industry leaders, and experts to discuss the evolving asset management landscape at its 2025 Conference on Emerging Trends in Asset Management. This year’s event focused on the latest innovations, regulatory developments, and challenges facing the industry, with particular attention to technological advancements, shifting investor expectations, and the global economic environment. Panelists discussed how these trends might shape the future of asset management and highlighted the importance of adaptability and forward-thinking strategies in increasingly complex capital markets.
The conference featured distinguished speakers, including senior SEC officials Natasha Vij Greiner (Director, Division of Investment Management), Hester Pierce (SEC Commissioner) and past leaders of the Division of Investment Management, as well as prominent asset management executives and leading academics. Below, we share some highlights.
The panelists discussed the growing significance of digital assets and tokenization of traditional financial products. Panelists, including executives from Andreessen Horowitz, DTCC, Copper, and Franklin Templeton, explored how blockchain technology is reshaping in which assets are recorded, transferred, and managed. They highlighted the concept of digital scarcity—where assets have intrinsic online value, and do not simply exist as digital representations of real-world items. The discussion emphasized the evolution of tokenized products, such as Franklin Templeton’s Benji fund, which leverages blockchain to provide real-time ownership records and seamless transfers. This type of innovation allows holders to monitor their positions instantly, bypassing traditional intermediaries and periodic reporting. While retail investor adoption is still limited, institutional interest is strong, particularly among crypto-native trading accounts that value the efficiency and immediacy of blockchain-based collateral management.
Panelists addressed operational benefits of blockchain, such as synchronized recordkeeping, 24/7-365 settlement, access to global liquidity pools that are efficient and transparent, and the ability to move collateral rapidly. One panelist opined that capabilities like this could have mitigated past financial crises. They noted ongoing challenges including the need for operability across various jurisdictions and platforms, scalable infrastructure, cybersecurity protections and privacy concerns.
Another panel, featuring representatives from BlackRock, Dimensional Fund Advisors, and SEC representatives, focused on the proliferation of investment products, particularly ETFs, in the wake of the 2008 financial crisis. Panelists discussed the balance between offering investors more choice and the risk of overwhelming them. Panelists noted that while ETFs have become a primary vehicle for innovation, interval funds and other structures are also evolving to meet investor needs. They highlighted the importance of data and transparency, especially as private markets become a larger part of the investment landscape.
The final panel examined growing interest in providing retail investors with access to private markets, which have traditionally been the domain of institutional investors. Opening private markets to retail investors presents both significant opportunities and notable challenges. Economic growth is increasingly concentrated in private markets. As public markets have been declining in relative importance over the past decade, retail investors are seeking new avenues for growth and diversification. By expanding access, individual investors could participate in deal flow and investment strategies heretofore reserved for institutions, potentially enhancing returns and broadening their opportunities. Panelists cautioned that private assets are often illiquid, opaque, and expensive.
Throughout the day, as panelists noted that the novel ideas of today, like tokenized funds and AI-driven investment tools, become mainstream products, the asset management industry will have to grapple with integrating technologies safely. As technology continues to advance, the industry’s focus remains on balancing innovation with transparency, security, and investor protection.
On May 29, 2025, the staff (“Staff”) of the Division of Corporation Finance of the U.S. Securities and Exchange Commission continued its recent pattern of issuing Staff guidance addressing cryptocurrency. The May 29 Staff statement, titled “Statement on Certain Protocol Staking Activities”, provides the Staff’s views on the staking of crypto assets (“Covered Crypto Assets”) that are intrinsically linked to the programmatic functioning of public, permissionless networks that use proof-of-stake (“PoS”) as a consensus mechanism (“PoS Networks”). Covered Crypto Assets are those that are (1) used to participate in and/or earned for participating in a PoS network’s consensus mechanism or (2) used to maintain and/or earned for maintaining the technological operation and security of the PoS network.
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In October 2024, Florida amended its blue sky law so that the “bad actor” disqualification provisions of Rule 506(d) under the Securities Act of 1933 also would apply to, among other exempt transactions, offerings to Florida institutional investors under Section 517.061(9) of the Florida Securities and Investor Protection Act. This amendment caused the securities industry to question whether sales could be made to Florida institutional investors under Rule 144A under the Securities Act as well as pursuant to certain other exemptions under the Securities Act. Since October 2024, the amendment was stayed pursuant to various executive orders.
After consultation with securities law practitioners, the Florida legislature recently adopted additional amendments to the Florida Securities and Investor Protection Act, which were signed into law on May 16, 2025. The new amendments remove the application of the bad actor disqualification provisions to the institutional purchaser exemption provided by Section 517.061(9) of the Florida Securities and Investor Protection Act. Among other changes, the list of permissible institutional investors under Section 517.061(9) was expanded to include institutional accredited investors under Rule 501 under the Securities Act.
On May 28, 2025, the U.S. Securities and Exchange Commission (the “SEC”) released several reports produced by its Division of Economic and Risk Analysis (“DERA”) detailing data and statistics regarding the use of the exemptions from Securities Act registration provided by Regulation A and Regulation Crowdfunding, or Regulation CF. Regulation A consists of two offering tiers: Tier 1 permits issuers to raise up to $20 million in any 12-month period, while the offering cap for Tier 2 offerings is $75 million in the same time period. Tier 2 offerings are subject to more stringent financial statement requirements, as well as more fulsome ongoing reporting requirements than Tier 1 offerings. However, securities sold in these offerings are “preempted” from state blue sky regulations, while those sold in Tier 1 offerings are not. Regulation CF caps offering proceeds at $5 million in any 12-month period. Securities must be sold through intermediaries, such as a broker-dealer or funding portal. In their reports, DERA identified key characteristics of offerings and issuers utilizing both exemptions, as outlined below.
In the ten-year period between adoption of amendments to Regulation A (sometimes referred to as “Regulation A+”) on June 19, 2015, and December 31, 2024, DERA found that there were more than 1,400 offerings conducted in reliance on the exemption, seeking to raise an aggregate of more than $28 billion in capital. During that time, approximately $9.4 billion in proceeds was reported by an aggregate of more than 800 issuers, with Tier 2 offerings raising, on average, $12.5 million. DERA noted the substantial discrepancy between the amount sought and both the total proceeds reported and the $75 million offering cap, and theorized as to the following possible causes: (i) the high frequency of best-efforts offerings, where there is no guarantee that any securities will be sold, (ii) the commonality of self-underwritten offerings and (iii) an overall lack of institutional investor participation and research coverage.
DERA found that Tier 2 offerings accounted for the vast majority of proceeds raised in Regulation A offerings, raising over 95% of reported proceeds, despite the higher compliance and reporting costs associated with these offerings. This is possibly due to the higher offering cap and preemption of state blue sky laws.
DERA also analyzed issuers utilizing Regulation A, finding that a typical Regulation A issuer is generally a small, young company, without an established record of profitability. Fewer than 20% of such issuers had filed registration statements under the Securities Act at any point, while a similar percentage filed reports under the Exchange Act at some time. In other words, Regulation A issuers are generally not reporting companies, perhaps supporting the idea that such companies are indeed smaller and less established. Additionally, the overwhelming majority of offerings were from unlisted issuers, although about 25% of offerings were conducted by OTC-quoted issuers (generally lower OTC Market tiers).
Overall, issuers that most successfully raised capital in reliance on the exemption (defined by DERA as having reported at least $1 million in overall proceeds as of December 31, 2024, constituting slightly more than half of the issuers in DERA’s sample) were generally larger companies (measured by total assets) that exhibited greater reliance on testing the waters and the use of intermediaries, although it is not clear that these characteristics actually impacted offering outcomes. DERA also found significant industry concentration, with financial sector issuers seeking approximately 46% of aggregate financing and 64% of reported proceeds. Business service-focused issuers and real estate companies, including REITs, also reported high amounts of capital sought and raised.
Based on DERA’s findings, between May 16, 2016 (the effective date of Reg CF) and December 31, 2024, there were approximately 8,500 crowdfunding offerings initiated by around 7,000 issuers, seeking between a minimum aggregate amount of approximately $560 million and a maximum aggregate amount of around $8.4 billion in capital. Overall, issuers reported approximately $1.3 billion in proceeds across around 4,000 offerings (likely a low estimate of the amount of capital actually raised due to variations in Form C-U filing practices). The average successful offering reported raising approximately $346,000, which, similar to offerings under Regulation A, is far below the offering cap of $5 million. The amount of capital sought is based on minimum target offering amounts disclosed by issuers in Form Cs filed with the SEC at commencement of the relevant offerings. Most offerings were structured with a minimum-maximum format and accepted oversubscriptions.
DERA also analyzed the types of issuers conducting Regulation CF offerings. The median issuer had approximately $80,000 in total assets, median revenue of $10,000 and employed three people. While most issuers had some assets and revenue at the time of the offering, the vast majority had not recorded a net profit. Like Regulation A issuers, most crowdfunding issuers were new to the capital markets, although approximately 20% of offerings involved issuers that had previously conducted a Regulation D offering. Further supporting the idea that Regulation CF issuers are early stage companies is the fact that only eight issuers (0.25%) that reported proceeds on Form C-U during this period conducted an initial public offering, or IPO. Issuers that successfully raised capital tend to be older, larger and more established, with higher revenues and more assets and employees. Offerings with reported proceeds also had shorter average durations and were perhaps less likely to have offering deadlines extended (potentially reflecting that less successful offerings were more likely to have their deadlines extended).
As of the end of 2024, there were 83 funding portals registered with the SEC and FINRA. The five largest intermediaries, based on the number of offerings, accounted for approximately 70% of initiated offerings and approximately 75% of offerings reporting proceeds, reflecting significant market concentration.
Read DERA’s report on Regulation A here and the report on Regulation CF here.
On June 26, 2025, the Securities and Exchange Commission (“SEC”) will host a roundtable to explore potential changes to executive compensation disclosure requirements. This event, highlighted in the SEC’s official announcement and accompanying statement, will bring together public company representatives, investors and other experts to answer questions and discuss potential changes to such requirements. The event is open to the public, who are encouraged to attend to provide comments and ask questions either before or after the meeting.
Executive compensation disclosure has long been a focal point for both regulators and market participants. The SEC’s rules require public companies to provide detailed information about how executives are paid, with the goal of promoting transparency and enabling investors to make informed decisions. However, over time, these requirements have grown increasingly complex, reflecting heightened investor scrutiny. Yet, it is unclear whether this increased complexity has actually provided investors with information useful in making voting and investment decisions. As regulatory requirements have become more burdensome, concerns have been voiced regarding the associated compliance burdens. In connection with the change in administration, a number of trade associations and industry groups in their letters to the SEC regarding regulatory burdens and capital formation have expressed some frustration with the costs and complexities associated with preparing detailed compensation disclosures, urging the SEC to address executive compensation disclosure requirements. In preparation for the Roundtable, Chair Atkins posed several questions for SEC staff and Roundtable participants to consider, including questions regarding the effectiveness of current disclosure requirements, the regulatory burden and compliance costs, investor needs and the clarity of disclosures.
To share comments or pose questions, members of the public may use the SEC’s Internet submission form or send an email to rule-comments@sec.gov with “4-855” included in the subject line.