Blackstone Private Credit Fund gets SEC staff relief on share class sales charge calculations

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Ashutosh Sureka

2 hours ago

Blackstone Private Credit Fund gets SEC staff relief on share class sales charge calculations — Blackstone gets SEC relief

Blackstone Private Credit Fund receives SEC staff assurance that it would not face a recommendation for enforcement action if it issues multiple share classes under its exemptive order without applying a per-share sales charge cap. The position also extends to multi-class business development companies issuing shares through private placements when they are subject to the same exemptive order condition.

Highlights

SEC staff granted Blackstone Private Credit Fund no-action relief on June 4, 2026, allowing compliance with FINRA Rule 2310 without per-share sales charge cap calculations.
Relief applies to BCRED and other multi-class BDCs, easing operational burdens from account-by-account and lot-by-lot tracking and share class conversions required by per-share caps.
SEC staff emphasized the no-action position is not a formal rule and is contingent on facts in Blackstone’s request, with potential to change if circumstances differ.

SEC staff position on exemptive order compliance

As reported by the Securities and Exchange Commission, staff in the Division of Investment Management says it would not recommend enforcement action against Blackstone Private Credit Fund, Blackstone Private Credit Strategies LLC and Blackstone Credit BDC Advisors LLC under sections of the Investment Company Act if the fund complies with FINRA Rule 2310 without calculating the sales charge cap on a per-share basis.

The June 4, 2026 staff letter addresses Blackstone Private Credit Fund, or BCRED, a closed-end management investment company that elects to be regulated as a business development company and publicly offers common shares on a continuous basis. BCRED relies on a multi-class exemptive order to offer multiple classes of shares.

FINRA Rule 2310 applies to unlisted continuously publicly offered BDCs such as BCRED and caps organization and offering expenses at 15% of gross proceeds, while limiting compensation payable to underwriters, broker-dealers and their affiliates to 10% of gross proceeds. The SEC staff says its no-action position also applies to a multi-class BDC issuing shares on a private placement basis if it is subject to the same per-share cap under its exemptive order.

Operational impact for private credit and BDC offerings

Blackstone argues that calculating the per-share cap adds operational complexity and cost beyond what is required to comply with the FINRA 10% cap, because it requires account-by-account and lot-by-lot tracking of underwriting compensation. The letter says that process can trigger monthly share class conversions for individual accounts or lots, rather than a single broader conversion when the overall FINRA cap is reached for an offering period.

The requestors also say the added monitoring creates significant reporting, review and processing demands for BCRED, its transfer agent and distribution partners. They contend that the per-share cap is unnecessary because the FINRA 10% cap already provides investor protections comparable to those applied to multi-class closed-end funds and open-end funds under FINRA Rule 2341.

The SEC staff adds that its response reflects an enforcement position only and does not amount to a legal conclusion or a Commission rule, regulation or statement. It says the position is based on the facts and representations in Blackstone's letter and could change if circumstances differ.

Our earlier article on the U.S. Supreme Court’s ruling backing the FCC’s in-house fine process explained how the decision preserved the agency’s ability to pursue financial penalties tied to wireless carriers’ handling of customer location data. We noted that the court’s 8-1 decision rejected constitutional challenges from AT&T and Verizon and, alongside another recent ruling on FCC funding, reinforced regulators’ room to use internal procedures as part of their enforcement toolkit.

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