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Week Ending April 8, 2005

HR 436 to amend the Investment Company Act of 1940 to provide incentives for small business investment and for other purposes.

BRIEF

   Business Development Companies (BDC) are publicly traded and invest in smaller companies called Eligible Portfolio Companies (EPC). The EPC’s are thereby allowed them access to capital and mangement expertise. Companies eligible for that type of investment are defined by the 1940 Act and the list has not been updated recently according to bill sponsor Rep. Sue Kelly (R-NY-19^th).

   The bill establishes a standard based largely on the small business’ market capitalization. The EPC is defined as having no class of equity securities listed for trade on a national securities exchange or traded through the national securities association but does have publicly traded equity securities with an aggregate value of not more than $250,000.

The BDC is defined to include that its’ publicly traded equity securities is more than $250,000 but not more than $500,000.

Sponsor: Representative Sue. W Kelly (R-NY-19^th)

Vote: Passed house by voice vote (April 6, 2005)

Cost to the taxpayers: No discernible cost.

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