On August 21st, the SEC adopted a rule to update the dollar threshold for a fund to qualify as a “qualifying venture capital fund” for section 3(c)(1) of the Investment Company Act of 1940. Qualifying venture capital funds are not included in the Act’s definition of an “investment company.”
The new rule will:
- introduce the Qualifying Venture Capital Funds Inflation Adjustment rule’s statutory directive
- adjust for inflation the dollar amount threshold from the current standard of $10 million to $12 million aggregate capital contributions and uncalled committed capital, based on the Personal Consumption Expenditures Chain-Type Price Index
- implement a method for the SEC to make future inflation adjustments to the threshold every five years per section 504 of the Economic Growth, Regulatory Relief, and Consumer Protection Act of 2018
For further details on the amendments, please see the Qualifying Venture Capital Funds Inflation Adjustment final rule on the SEC’s website. The rule will go into effect 30 days following its publication in the Federal Register.
Source:
SEC Adopts Rule to Update Definition of Qualifying Venture Capital Funds (sec.gov)
