Keller Albertson – Global Investment Law Watch

Modernized SBIC Program Hits Milestones

Feb 27 2024

By: TJ Bright, Matt F. Phillips, and Tristen C. Rodgers

For the past two decades, the Small Business Investment Company (SBIC) program (the SBIC Program) has primarily offered one type of government-guaranteed loan to private investment funds holding an SBIC license (SBICs): the “Standard SBIC Debenture.” This loan requires private funds to pay the U.S. Small Business Administration (SBA) interest semi-annually, which closely aligns with the cash flow patterns of mezzanine debt and private credit funds. As a result, the ecosystem of debt-focused SBICs has thrived. However, the SBIC Program has been less attractive to funds with equity-oriented strategies.

Europe: Final SDR rules published by FCA – Time to label your funds (maybe)

Dec 01 2023

The FCA has published its final rules on the UK’s Sustainability Disclosure Requirements (SDR) regime. The key features include:

EUROPE: New Screening Criteria for the EU Taxonomy’s Environmental Objectives

Nov 27 2023

By: Áine Ní Riain and Gayle Bowen

Following their adoption and publication in draft form by the European Commission last June, two new EU Taxonomy delegated acts were published in the Official Journal on 21 November, and will apply from January 2024. They confirm new and amended technical screening criteria (TSCs) in relation to the environmental objectives in the Taxonomy Regulation. This is a significant build-out in the application of the Taxonomy Regulation given that for an economic activity to be taxonomy-aligned, it must:

Brokers Beware – The Massachusetts Fiduciary Rule is Here to Stay

Aug 28 2023

On 25 August 2023, the Massachusetts Supreme Judicial Court reversed a Massachusetts Superior Court ruling and denied Robinhood Financial LLC’s attempt to block the implementation of Massachusetts’s unique fiduciary duty rule, adopted in February 2020 within weeks of the final adoption of the SEC’s Regulation Best Interest, which imposes the duties of care and loyalty on broker-dealers (Fiduciary Rule). A summary of the Fiduciary Rule is available here. Robinhood’s action to overturn the Rule was brought after the Commonwealth of Massachusetts brought an administrative action accusing Robinhood of violating Fiduciary Rule with its video game-like design and marketing tactics.

United States: New Conference, More Rulemaking?

May 22 2023

At the Conference On Emerging Trends In Asset Management sponsored by the US Securities and Exchange Commission (SEC) and held 19 May 2023, Chair Gary Gensler, and Director of the SEC’s Division of Investment Management, William Birdthistle, called for greater discourse with industry participants and highlighted the strengths of recent rulemaking activities of the SEC.

Mr. Birdthistle kicked off the conference by referring to funds and investment advisers as “critical agents” in the investment management industry and in advancing the SEC’s mission. He also acknowledged the need for the SEC and its staff to be open to different opinions. He did not, however, indicate how such different views have been—or would be—addressed in the rulemaking process or otherwise.

United States: Staff Provides Legend Alternative for Non-Transparent ETFs Short on Ad Space

Mar 30 2023

By Keri E. Riemer

Non-transparent exchange-traded funds (ETFs) that are struggling to fit in digital advertisements the specific risk legend set forth in their exemptive orders (Exemptive Order Risk Legends) may be in luck. On 29 March 2023, the staff (Staff) of the Division of Investment Management of the U.S. Securities and Exchange Commission (SEC) issued a statement (Statement) requesting that non-transparent ETFs use in such ads either (i) the text and formatting of their Exemptive Order Risk Legends; or (ii) the following text and formatting (with bold as shown and without bullets) (the Staff Risk Legend):

Author:Keller Albertson