Mandatory Electronic Submission of Applications for Orders under the Investment Company Act and Filings Made Pursuant to Regulation E
A Small Entity Compliance Guide1
The Commission has adopted amendments to rules regarding the Electronic Data Gathering, Analysis, and Retrieval (EDGAR) system to make mandatory the electronic submission on EDGAR of applications for orders under any section of the Investment Company Act of 1940 ("Investment Company Act") and Regulation E filings of small business investment companies and business development companies. (Rule 101 of Regulation S-T.) The Commission also made the temporary hardship exemption unavailable for submission of applications under the Investment Company Act. (Rule 201 of Regulation S-T.) The Commission eliminated the requirements that certain documents accompanying an application be notarized and that applicants submit a draft notice as an exhibit to an application. (Rule 0-2 under the Investment Company Act.) The effective date of the amendments is January 1, 2009.
Mandatory Electronic Submission of Investment Company Applications
As with other entities that make submissions on EDGAR, applicants for orders under the Investment Company Act are subject to the provisions of Regulation S-T and the EDGAR Filer Manual. Regulation S-T includes detailed rules concerning mandatory and permissive electronic EDGAR submissions; it also makes clear that requests for confidential treatment must be made in paper format.
Regulation S-T requires the electronic filing of any amendments and related correspondence and supplemental information pertaining to a document that is the subject of mandated EDGAR submission. These requirements also apply to companies and persons who submit applications. The requirement to file amendments electronically applies to new applications filed electronically on EDGAR and to amendments to applications initially filed in paper.
One technical specification that the EDGAR Filer Manual includes is the electronic "submission type" for each submission made on EDGAR. The EDGAR electronic submission types for applications are designed to facilitate and expedite the review of these applications. The EDGAR Filer Manual and the EDGARLink software provide for three EDGAR electronic submission types for applications: 40-APP, 40-OIP, and 40-6B.
The EDGAR Filer Manual provides guidance in choosing the correct submission type.
For applications with multiple co-applicants, the applicants will submit the application with all co-applicants included in one submission. The applicants will choose one applicant to list first as the "primary" co-applicant. Then, they will include in the EDGAR template the information for all other co-applicants, i.e., the CIK of each co-applicant and, for amendments, the file number assigned to each co-applicant when the original application was filed. Applicants can be dropped from or added to an application with each amendment submission.
Mandatory Electronic Submission of Regulation E Filings
Regulation E provides for the exemption from registration of securities issued by small business investment companies registered under the Act and business development companies regulated under that Act, subject to the terms and conditions of the regulation. Rule 604 of Regulation E requires the filing of notification on Form 1-E of sales of securities under Regulation E. Rule 607 of Regulation E requires the filing of sales material used in connection with the offering. Rule 609 of Regulation E requires the filing of reports of sales on Form 2-E. The Commission amended Regulation S-T to make these filings mandatory EDGAR submissions.
The adopting release for the Mandatory Electronic Submission of Applications for Orders under the Investment Company Act and Filings Made Pursuant to Regulation E can be found on the SEC's website at http://www.sec.gov/rules/final/2008/33-8981.pdf.
Regulation S-T can be accessed through the "Corporation Finance" section of the SEC's website at http://www.sec.gov/divisions/corpfin/ecfrlinks.shtml.
A detailed discussion of Regulation S-T and electronic filing on EDGAR is contained in "Electronic Filing and the EDGAR System: A Regulatory Overview," available at http://www.sec.gov/info/edgar/regoverview.htm.
The Commission's EDGAR Filer Manual is available at http://www.sec.gov/info/edgar.shtml.
Each applicant that does not currently make filings with the SEC, on EDGAR or in paper, will have to apply for access codes to file electronically. Instructions for applying for access can be found in Section 3.1 of the EDGAR Filer Manual.
Contacting the SEC
The SEC's Division of Investment Management is happy to assist small companies with questions regarding the mandatory electronic submission of applications for orders under the Investment Company Act and filings made pursuant to Regulation E. For fastest response, please leave your name, phone number, and a detailed message on the Division of Investment Management's EDGAR Inquiry Line, at (202) 551-6989, or, for questions related to transmitting applications to the EDGAR system, contact the division's EDGAR Filer Support staff (202-551-8900; option 5).
In addition, the Division's Office of Chief Counsel answers questions submitted by e-mail and telephone. You can submit a question by e-mail to firstname.lastname@example.org, and a staff member of the office will call you to discuss your question.
1 This guide was prepared by the staff of the U.S. Securities and Exchange Commission as a "small entity compliance guide" under Section 212 of the Small Business Regulatory Enforcement Fairness Act of 1996, as amended. The guide summarizes and explains rules adopted by the SEC but is not a substitute for any rule itself. Only the rule itself can provide complete and definitive information regarding its requirements.