SBIA lauds SEC action on AFFE rule

SBIA lauds action by the SEC to streamline reporting for BDCs

Amendments will update and modernize mutual fund and exchange-traded fund disclosures to provide greater clarity and more consistent information regarding fees, expenses, and principal risks

Washington, D.C. (August 10, 2020) – The Small Business Investor Alliance (SBIA), the premiere association representing lower middle market private equity and its investors, today applauds the SEC for proposing regulatory improvements to ensure that the public is given accurate information about small business investments. Last week, the SEC held an open meeting to vote on a rule proposal that would amend a number of disclosure, delivery, and advertising requirements for mutual funds and Business Development Companies. The proposal would limit or end the overstating of the acquired fund fees and expense (“AFFE”) disclosure that have harmed shareholders of BDCs.

“This is a very positive step. The SEC has recognized that there is a problem and a solution is needed. The AFFE has artificially double-counted the cost of investing in BDCs and lowered shareholder protection for BDC retail investor. The SEC’s proposal is a good faith effort and we look forward to working with the SEC to ensure the final solution works for both BDC shareholders and the indices,” said SBIA President Brett Palmer.

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About the Small Business Investor Alliance (SBIA)

The Small Business Investor Alliance (SBIA) is the premier organization of lower middle market private equity funds and investors. SBIA works on behalf of its members as a tireless advocate for policies that promote competitive markets and robust domestic investment for growing small businesses. SBIA has been playing a pivotal role in promoting the growth and vitality of the private equity industry for over 60 years. For more information, visit or call (202) 628-5055.

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