Coming soon: Structure data requirements for investment companies | Eversheds Sutherland (US) LLP

On April 8, 2020, the Securities and Exchange Commission (the SEC) adopted rule amendments to require business development companies (BDCs) and closed-end funds registered under the Investment Company Act (Registered CEFs, and together with BDCs, the Affected Funds) comply with certain structured data and Inline XBRL requirements. Once effective, the rule amendments will require:

  • BDCs to submit financial statement information using Inline XBRL format1
  • Affected Funds to include structured cover page information in their Registration Statements on Form N-2 using Inline XBRL format2 and to tag the following prospectus items using Inline XBRL format in registration statements or post-effective amendments filed on Form N-2, any form of prospectus filed pursuant to Rule 424 under the Securities Act, and any Exchange Act or Investment Company Act reports:
    • fees and expenses table
    • senior securities table
    • investment objectives and policies
    • certain risk factors
    • share price data
    • capital stock, long-term debt, and other securities3
  • Filings on Form 24F-2, which are filed by interval funds deemed to have registered an indefinite amount of securities, to be submitted in eXtensible Markup Language format.

Reminder of effective dates

The structured data reporting requirements will become effective as follows:

  • Affected Funds eligible to file pursuant to General Instruction A.2 of Form N-2 (often referred to as short form N-2) must comply with the Inline XBRL structured data requirements for the financial statements, registration statement cover page, and certain prospectus information by August 1, 2022
  • All other Affected Funds must comply by February 1, 2023

Affected Funds are urged to begin planning. Affected Funds should determine to what extent current systems, whether at the Affected Fund or at service providers, will be able to meet the new structured data requirements and whether such systems will need to be modified or developed to comply with the new structured data requirements.

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1 Item 601(b)(101)(i) of Regulation S-K previously excluded all registrants that prepare financial statements in accordance with Article 6 of Regulation S-X (i.e., BDCs and Registered CEFs) from the Inline XBRL financial statement tagging requirements. Amended Item 601(b)(101)(i)-(ii) of Regulation S-K only excludes Registered CEFs from the tagging requirement.

2 General Instruction I of the Amended Form N-2 will require Affected Funds to tag all of the data points that appear on the cover page on Form N-2, except the Calculation of Registration Fee table, using Inline XBRL format.

3 See General Instruction I.2 and I.3 of the Form N-2. Affected Funds will be required to submit “Interactive Data Files” (i.e., machine-readable computer code that presents information in XBRL format) as follows: (i) for any registration statements and post-effective amendments, Interactive Data Files must be filed either concurrently with the filing or in a subsequent amendment that is filed on or before the date of the registration statement or post-effective amendment that contains the related information becomes effective; (ii) for any prospectus filed pursuant to Rule 424, Interactive Data Files must be submitted concurrently with the filing; and (iii) for any Exchange Act report or Investment Company Act, as applicable, that an Affected Fund filing a registration statement on Form N-2 pursuant to General Instruction A.2 (often referred to as short-form N-2), Interactive Data Files must be submitted concurrently with the filing.

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https://www.jdsupra.com/legalnews/coming-soon-structure-data-requirements-1903803/

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