Small Business Group Joins Call for Changes to SEC’s Derivatives Rule

A group representing small business investors joined larger funds in calling for changes to a proposed Securities and Exchange Commission rule that would place conditions and fund limits on using derivatives.

The SEC’s rule, first proposed in December, would place overly burdensome restrictions on business development companies that invest in small- and medium-sized firms, Small Business Investor Alliance President Brett Palmer said in a March 28 comment letter to the SEC.

Palmer said the rule doesn’t differentiate enough between funds regulated by the Investment Act of 1940, also known as ’40 Act funds. He said the failure to distinguish business development companies from other funds “goes in the opposite direction of what Congress intended, for instance, by capping their use of derivatives to that of what a ’40 Act fund should be doing, or by treating their revolving lending facilities as financial commitment transactions, thereby subjecting them to coverage requirements.”

The Small Business Investor Alliance, a Washington-based trade group representing lower middle market private equity funds, filed its comments on the last day public comments were due for the SEC proposal. A group of large funds, including AQR Capital and John Hancock, also criticized the proposal.


Finance Brief: Week in Review & What’s Ahead

Treasury Secretary Steven Mnuchin told lawmakers that the Trump administration does not support reinstating the firewall between investment and commercial banking required under the Depression-era Glass-Steagall Act, clarifying previous remarks from White House officials that indicated a preference for reinstating the law that was repealed in 1999.

Finance Brief: Wells Fargo Sued by Philadelphia Over Alleged Predatory Lending

The City of Philadelphia sued Wells Fargo & Co., alleging that the country’s largest mortgage lender engaged in predatory lending. The lawsuit, which comes after a recent Supreme Court decision allowing cities to sue banks for alleged discrimination that leads to widespread defaults and lower property tax revenue, compounds Wells Fargo’s legal woes in the wake of its consumer fraud scandal.

Load More