On 6 May 2025, the United States Securities and Exchange Commission (US SEC), via Investment Company Act Release No. 35571, through an order granted a conditional exemption to Monroe Capital BDC Advisors, LLC, Monroe Capital Income Plus Corporation, and Monroe Capital Enhanced Corporate Lending Fund, allowing the issuance of multiple classes of shares with differing fee structures. Acting under its authority pursuant to Section 6(c) of the United States Investment Company Act of 1940, US SEC approved the applicants’ request for relief from Sections 18(a)(2), 18(c), 18(i), and 61(a) of the United States Investment Company Act of 1940. These sections govern capital structure limitations and shareholder equality provisions applicable to business development companies and closed-end investment companies.
The exemption permits the applicants to issue multiple share classes with distinct sales loads and asset-based distribution or service fees, a structure traditionally not available to business development companies or closed-end funds under the statutory framework. The order followed the filing of an application on 4 April 2025, and the subsequent publication of a notice of the application on 10 April 2025 (US Investment Company Act Release No. 35532). No requests for a hearing were received by US SEC, and no hearing was ordered. The US SEC Division of Investment Management issued the order under delegated authority, determining that the exemption is consistent with the protection of investors, appropriate in the public interest, and aligned with the policies and purposes of United States Investment Company Act of 1940.
Business development companies or other registered investment companies may seek similar exemptions by filing an application under Section 6(c), which provides the Commission with discretionary power to exempt any person, security, or transaction from provisions of the Investment Company Act or related rules, if such relief is deemed necessary or appropriate. The process is governed procedurally by Rule 0-5 under the Act. Applicants must clearly identify the provisions from which relief is sought and demonstrate with supporting documentation that the exemption would not undermine investor protections or the regulatory objectives of United States Investment Company Act of 1940.
Once the application is filed, it undergoes review by the US SEC Division of Investment Management. If deemed complete, a notice is published by the Commission, allowing for a public comment and hearing request period, usually lasting 25 days. If no opposition arises, and the US SEC does not independently schedule a hearing, it may issue a final exemption order. Such orders are conditional and require the applicant to adhere to the representations made in their submission. Any material deviation or failure to comply may result in regulatory action or revocation of the exemption.
These exemptions are granted by exercise of the Commission’s flexibility under Section 6(c), offering qualifying investment companies a path to modernise their product offerings while remaining within the statutory framework of the United States Investment Company Act. The order is effective immediately.
(Source: https://www.sec.gov/files/rules/ic/2025/ic-35571.pdf)
