§80a–62 Distribution and repurchase of securities

Summary

Makes the rules in section 80a–23 apply to business development companies like they do to closed-end investment companies, but with three exceptions. First, the ban in section 80a–23(a)(2) does not apply to a company that is fully owned by, or controlled by, a business development company if, right after it issues securities for something other than cash or other securities, it will not be an investment company under section 80a–3(a). Second, a business development company may sell its own common stock or rights to buy that stock at a price below current net asset value if three things happen: a majority of all voting shareholders and a majority of the non‑affiliated voting shareholders approved that policy at the last annual meeting held within one year before the sale (this approval is not needed for the company’s initial public offering); a required majority of the board or partners decided the sale is in the company’s and shareholders’ best interest; and that same required majority, after consulting underwriters if any, in good faith and just before seeking firm purchase commitments or issuing the shares, decides the sale price is at least a price that closely matches market value minus any selling commission or discount. Third, the company may sell its common stock below net asset value when such stock is issued on exercise of warrants, options, or rights that were issued under section 80a–60(a)(4).