WASHINGTON — Now that the Securities and Exchange Commission has adopted an amendment to increase the availability of capital to certain smaller companies, credit unions and other lenders may be able to help more small businesses.
Announced on May 15, the rule amendment adoption falls under the Investment Company Act, according to SEC. The commission said it amended Rule 2a-46 to expand the definition of “eligible portfolio company” to include any domestic operating company with securities listed on a national securities exchange, if the company has a market capitalization of less than $250 million. The amendment targets those businesses that may not have ready access to the public capital markets or other forms of conventional financing, SEC said.
The Investment Company Act defines eligible portfolio company to include a domestic operating company that, among other things, does not have any class of securities that are marginable under rules issued by the Federal Reserve Board.
The amendment to Rule 2a-46 takes effect in July.