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SEC Approves Exemption for Business Development Companies

Strategic Insights

— 2 min read

The Office of the Federal Register has issued a notice on an application under Section 6(c) of the Investment Company Act of 1940 for an exemption from certain provisions of the Act. The applicants, Star Mountain Lower Middle-Market Capital Corp. and Star Mountain Fund Management, LLC, have requested an order to permit registered closed-end investment companies to issue multiple classes of shares with varying sales loads and asset-based distribution and/or service fees.

The applicants, which have elected to be regulated as business development companies, believe that the exemption is necessary to allow them to offer investors a more flexible and attractive investment option. The exemption would enable them to issue shares with different sales loads and distribution fees, which would allow investors to choose the type of investment that suits their needs.

The SEC has received the application on June 13, 2025, and an order granting the requested relief will be issued unless the Commission orders a hearing. Interested persons may request a hearing by emailing the SEC's Secretary at Secretarys-Office@sec.gov and serving the Applicants with a copy of the request.

Key Takeaways:

  • The applicants, Star Mountain Lower Middle-Market Capital Corp. and Star Mountain Fund Management, LLC, have requested an exemption under Section 6(c) of the Investment Company Act of 1940 to issue multiple classes of shares with varying sales loads and asset-based distribution and/or service fees.
  • The exemption is necessary for the applicants, which have elected to be regulated as business development companies, to offer investors a more flexible and attractive investment option.
  • The applicants believe that the exemption would enable them to issue shares with different sales loads and distribution fees, which would allow investors to choose the type of investment that suits their needs.
  • The SEC has received the application on June 13, 2025, and an order granting the requested relief will be issued unless the Commission orders a hearing.
  • Interested persons may request a hearing by emailing the SEC's Secretary at Secretarys-Office@sec.gov and serving the Applicants with a copy of the request.
  • The exemption would apply to registered closed-end investment companies that have elected to be regulated as business development companies.

Statistics:

  • The application was filed on June 13, 2025.
  • The SEC has received the application and an order granting the requested relief will be issued unless the Commission orders a hearing.
  • The hearing requests should be received by the Commission by 5:30 p.m. on July 28, 2025.
  • The SEC's EDGAR system may be searched at https://www.sec.gov/edgar/searchedgar/companysearch.

Sources:

  • [Agency: Securities and Exchange Commission ("Commission" or "SEC")]
  • [Source: Washington: Office of the Federal Register]
  • [Date: July 7, 2025]
  • [FR Doc. 2025-12622 Filed 7-7-25; 8:45 am]
  • [BILLING CODE 8011-01-P]

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