US SEC proposes to update definition of 'qualifying' VC funds
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FILE PHOTO: Signage is seen at the headquarters of the U.S. Securities and Exchange Commission (SEC) in Washington, D.C., U.S., May 12, 2021. REUTERS/Andrew Kelly/File Photo
(Reuters) -Wall Street's top watchdog on Wednesday proposed new rules that would raise the dollar threshold for venture capital funds to be covered by a principal statute regulating investment companies.
The U.S. Securities and Exchange Commission said this was called for under a 2018 congressional mandate, which called for adjustments for inflation every five years.
So-called qualifying venture capital funds are excluded from the definition of "investment company" under the Investment Company Act of 1940, according to the SEC.
The new rule would raise the threshold to $12 million in aggregate capital contributions and uncommitted capital from the current $10 million based on the Commerce Department's Personal Consumption Expenditures price index and create a process future inflation adjustments, the agency said in a statement.
The proposal is subject to a period of public comment and could be modified prior to any vote on whether to adopt it.
(Reporting by Douglas GillisonEditing by Marguerita Choy)
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