SEC Seeks OMB Extension for Rule 3a-8 Recordkeeping Safe Harbor
AI-generated summary for informational purposes only. Not legal advice. See the original source for the authoritative text.
This notice keeps in place the SEC’s approval to collect limited internal recordkeeping information from research and development companies that choose to use Rule 3a-8. That rule gives certain R&D companies a safe harbor from being treated as investment companies, if their boards document that the company is mainly in a non-investment business and adopt a written policy for capital-preservation investments. The practical effect is narrow. Companies that rely on the safe harbor should make sure board resolutions, minutes, and investment policies are properly adopted and kept under normal state-law record retention rules. No filing with the SEC is required, and the SEC estimates no annual recordkeeping burden.
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Key Changes
- Extends OMB approval for the SEC’s information collection tied to Rule 3a-8.
- Confirms that R&D companies using the safe harbor must keep board records showing they are mainly engaged in a non-investment business.
- Confirms that companies relying on the rule need a written policy for capital-preservation investments, but do not need to file documents with the SEC.
Obligations
What this law requires
An R&D company that seeks to rely on Rule 3a-8 safe harbor must have its board of directors adopt a resolution evidencing that the company is primarily engaged in a non-investment business.
An R&D company relying on Rule 3a-8 must record the board resolution contemporaneously in its minute books or comparable corporate records.
An R&D company relying on Rule 3a-8 must retain the board resolution records for as long as those records must be maintained under applicable state law.
The board of directors of a company relying on Rule 3a-8 must adopt a written policy regarding the company’s capital preservation investments.