Securities Lawyer's Deskbook
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Investment Company Act of 1940

Section 62 -- Loans

Notwithstanding the exemption set forth in section 6(f) [15 USCS § 80a-6(f)], section 21 [15 USCS § 80a-21] shall apply to a business development company to the same extent as if it were a registered closed-end investment company, except that nothing in that section [15 USCS § 80a-21] shall be deemed to prohibit--

  1. any loan to a director, officer, or employee of, or general partner in, a business development company for the purpose of purchasing securities of such company as part of an executive compensation plan, if such loan meets the requirements of section 57(j) [15 USCS § 80a-56(j)]; or

  2. any loan to a company controlled by a business development company, which companies could be deemed to be under common control solely because a third person controls such business development company.

Legislative History

Aug. 22, 1940, ch 686, Title I, § 62, as added Oct. 21, 1980, P.L. 96-477, Title I, § 105 in part, 94 Stat. 2287.

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