H. Rept. 115-646 1 (2018-04-24)

handle is hein.congrecreports/crptxabeg0001 and id is 1 raw text is: AUTHENTICATEO

                   115TH CONGRESS                                     REPORT
                      2d Session    HOUSE OF REPRESENTATIVES          115-646


                    APRIL 24, 2018.-Committed to the Committee of the Whole House on the State of
                                     the Union and ordered to be printed

                      Mr. HENSARLING, from the Committee on Financial Services,
                                       submitted the following


                                        [To accompany H.R. 4267]
                            [Including cost estimate of the Congressional Budget Office]
                     The Committee on Financial Services, to whom was referred the
                   bill (H.R. 4267) to amend the Investment Company Act of 1940 to
                   change certain requirements relating to the capital structure of
                   business development companies, to direct the Securities and Ex-
                   change Commission to revise certain rules relating to business de-
                   velopment companies, and for other purposes, having considered
                   the same, report favorably thereon without amendment and rec-
                   ommend that the bill do pass.
                                       PURPOSE AND SUMMARY
                     On November 7, 2017, Representative Steve Stivers introduced
                   H.R. 4267, to amend the Investment Company Act of 1940 to mod-
                   ernize the regulatory regime for Business Development Companies
                   (BDCs). BDCs are investment vehicles designed to facilitate cap-
                   ital formation for small and middle-market companies. The legisla-
                   tion requires the SEC to streamline the offering, filing, and reg-
                   istration processes for BDCs to eliminate significant regulatory
                   burdens. This legislation also increases a BDCs' ability to deploy
                   capital to businesses by reducing the BDC's asset coverage ratio-
                   or required ratio of assets to debt-from 200% to 150% if certain
                   requirements are met.
                               BACKGROUND AND NEED FOR LEGISLATION
                     The goal of H.R. 4267 is to help fuel capital formation for small-
                   and middle-market businesses that have difficulty obtaining bank
                   and other traditional financing by providing BDCs some relief from

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