On April 18, 2018, the Securities and Exchange Commission (SEC) introduced a package of proposals aimed at enhancing the quality and transparency of investors’ relationships with investment advisers and broker-dealers. The proposed Regulation Best Interest introduces three obligations for broker-dealers designed to require broker-dealers to act in the best interest of a retail customer when making a recommendation of any securities transaction or investment strategy involving securities: the disclosure obligation, the care obligation, and the conflict of interest obligation. Given that the Regulation Best Interest proposing release is well over 1,000 pages, we have summarized in a chart key aspects of the proposed rule. Our chart is available here.
On March 23, 2018, Congress passed a $1.3 trillion omnibus spending bill titled the Consolidated Appropriations Act of 2018, which included the Small Business Credit Availability Act. Included in the Small Business Credit Availability Act are various changes to the federal securities laws and regulations that impact business development companies (“BDCs”). Most significantly, the BDC-related portions of the legislation expand the ability of BDCs to utilize leverage and provide them with the ability to rely on more flexible SEC communication and offering rules currently only available to operating companies.
This chart summarizes the BDC-related provisions of the legislation.