Incomplete and Inappropriate Tagging for Business Development Companies’ Schedule of Investments

Rule 405(e) of Regulation S-T describes the tagging requirements for financial statement schedules, which includes a fund’s Schedule of Investments (SOI), pursuant to rule 12-12, 12-13, 12-13A through 13D, and 12-14 of Regulation S-X. Accordingly, a Business Development Company (BDC) must tag its SOI consistent with the tagging requirements in Rule 405(e) of Regulation S-T.

Staff in the Division of Economic and Risk Analysis conducted an assessment on the SOI tagging in BDCs’ Forms 10-K for fiscal year ending in 2024. Among those reviewed, staff observed the following common tagging issues:

1. Inappropriately tagged the subtotals of investments by industry or by investment type with Investment, Identifier [Axis]. These subtotals should be tagged using dimensions Industry Sector [Axis] or Investment Type [Axis].
2. Tagged data did not include the issuer affiliation information at the investment level.
3. When tagging open interest rate swap contracts, inappropriately used Derivative Instrument Risk [Axis] or Investment, Identifier [Axis]. Filers should use Open Swap Contract, Identifier [Axis] instead.
4. When tagging the amount of “Liabilities in excess of other assets”, inappropriately created a custom element or tagged it with Investment Owned, Fair Value along with dimension Investment, Identifier [Axis]. Filers should use the standard Noninvestment Assets Less Noninvestment Liabilities element instead.

The SOI contains valuable information about a BDC’s investment portfolio. It is essential that the data are tagged accurately and consistently across different BDCs. Staff Interpretations and FAQs Related to Interactive Data Disclosure Question F.7 (updated) provides general guidance on the tagging requirements of the SOI.

Financial Accounting Standards Board’s Generally Accepted Accounting Principles Taxonomy Implementation Guide Series – Financial Services – Investment Companies (Including SEC S-X Schedules for Business Development Companies) provides examples of the modeling for reporting by investment companies, including the SOI. Filers are encouraged to review their tagging of the SOI and make necessary corrections.

For more data quality reminders, see Staff Observations and Guidance.