ADI 2024-13: Short-Form Registration Statements on Form N-2 and Timeliness of Required Reports Filed by WKSIs and Other Seasoned Issuers
March 6, 2024
The staff in the Division of Investment Management’s Disclosure Review and Accounting Office reminds registrants of the eligibility requirements for filing short-form registration statements on Form N-2. On April 8, 2020, the Securities and Exchange Commission (the “Commission”) adopted rule and form amendments to allow business development companies (“BDCs”) and other closed-end funds that qualify as “seasoned issuers” to use a short-form registration statement on Form N-2.[1]
The staff reminds registrants that, to be eligible to file a short-form registration statement (or, under certain circumstances, to continue using an effective short-form registration statement) on Form N-2, a fund must timely file all reports that are required to be filed (“required reports”) under Section 30 of the Investment Company Act of 1940 (“Investment Company Act”) and Sections 13 or 15(d) of the Securities Exchange Act of 1934 (“Exchange Act”), as applicable, during the twelve calendar months (and any portion of a month) immediately preceding the filing of the registration statement (“eligibility testing period”).[2] For example, during the eligibility testing period a registered closed-end fund must have timely filed all reports required under Section 30 of the Investment Company Act, such as reports on Forms N-PX, N-CEN and N-PORT.[3] Registered closed-end funds must have also timely filed all annual and semi-annual reports to shareholders on Form N-CSR, and a BDC must have filed all annual and quarterly reports on Forms 10-K and 10-Q. [4]
A registrant that fails to file a required report on time would not, as of the next eligibility determination date applicable to the registrant,[5] meet the rule and form requirements that permit the use of a short form registration statement on Form N-2.
The staff encourages registrants to review their existing compliance policies and procedures to ensure that all required reports are prepared, finalized, transmitted, and filed on a timely basis.[6] For example, registrants may wish to:
- Review compliance policies and procedures and any related compliance calendars to identify potential issues that could affect timeliness, including, for example, turnover of key personnel or service providers; and
- Provide or enhance existing training for relevant personnel to ensure awareness and understanding of responsibilities for timely filing of required reports.
Registrants are also reminded that, subject to certain limited exceptions, seasoned issuers are required to file a new shelf registration statement every three years.[7]
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ADIs are recurring publications that summarize the staff’s views regarding various requirements of the federal securities laws.
The statements in this ADI represent the views of the staff of the Division of Investment Management. This update is not a rule, regulation, or statement of the Securities and Exchange Commission. Further, the Commission has neither approved nor disapproved its content. This ADI, like all staff statements, has no legal force or effect: it does not alter or amend applicable law, and it creates no new or additional obligations for any person. Future changes in rules, regulations, and/or staff no-action and interpretive positions may supersede some or all of the information in a particular ADI.
We hope that this ADI will assist registrants in preparing their filings. We also welcome feedback on this ADI and on any disclosure matters. If you have any questions or feedback, please contact:
Disclosure Review and Accounting Office
Phone: 202.551.6921
Email:IMDRAO@sec.gov
[1] See Securities Offering Reform for Closed-End Investment Companies, Investment Company Act Release No. 33836 (Apr. 8, 2020) (“Adopting Release”). The term “seasoned issuer” refers to an issuer that meets the requirements in General Instruction A.2 to Form N-2. “Well-known seasoned issuer” (“WKSI”), as defined in Rule 405 of the Securities Act of 1933(“Securities Act”), is a seasoned issuer that, among other things, is not an ineligible issuer and has a worldwide market value of its outstanding voting and non-voting common equity held by non-affiliates of $700 million or more as of any date within 60 days of the determination date. See also Adopting Release, at n. 28.
[2] See General Instruction A.2 of Form N-2; General Instruction I.A. of Form S-3. In the case of an already effective registration statement, the registrant must have timely filed all required reports during the twelve months preceding the updating of the registration statement and prospectus under Section 10(a)(3) of the Securities Act (also “eligibility testing period”).
[3] See Adopting Release at Section II.B.3.
[4] See Adopting Release at Section II.B.3. The staff reminds registrants that Form N-CSR is required to be filed within 10 days of transmitting a shareholder report and shareholder reports are required to be transmitted within 60 days of the close of the period for which the report is being made. Thus, registrants generally have 70 days to file Form N-CSR after the end of a reporting period.
[5] Eligibility to use the short form is tested each time that a registrant files a new registration statement, updates its effective registration statement and prospectus to comply with Section 10(a)(3) under the Securities Act, or files a periodic report (Form 10-K or Form N-CSR, as applicable) that contains registrant’s audited financial statements for its most recently completed fiscal year that operates as a Section 10(a)(3) update to its effective registration statement and prospectus. See Rules 401(b) and 405 under the Securities Act.
[6] Registrants are also reminded that certain filing deadlines may be extended under Rule 12b-25 of the Exchange Act or Rule 8b-25 of the Investment Company Act, as applicable, to the extent a registrant is unable to timely file certain required reports without unreasonable effort or expense or if it is impractical to furnish any required information, document, or report within the prescribed time period.
[7] See Rule 415(a)(6) of the Securities Act.