The SEC Division of Investment Management ("Division") granted no-action relief to a publicly traded company from the requirement that it register its subsidiaries as investment companies. The Division explained that it granted relief partly because the company provides debt and equity financing to participants in the energy efficiency and renewable energy sector. In addition, the Division stated, the company's subsidiaries are engaged primarily in "making loans and acquiring notes evidencing loans" ("Notes") to project companies ("ProjectCos") or "managing members of ProjectCos . . . which are owned by renewable energy companies, including solar energy and wind energy companies."
In its request for relief, the company stated that:
- each of its subsidiaries "currently holds at least 80 percent of the value of its total assets in the Notes and other notes that [it] believe[s] should qualify as Investment Company Act Section 3(c)(5)(A) and/or (B) qualifying assets";
- "at least 80 percent of the net income after taxes received by each Subsidiary for the past four fiscal quarters combined was derived from the Notes and other notes that qualify as Investment Company Act Section 3(c)(5)(A) and/or (B) qualifying assets"; and
- "none of the subsidiaries has issued, and none now issues or proposes to issue redeemable securities, face-amount certificates of the installment type or periodic payment plan certificates."
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
