<![CDATA[BlackRock Enhanced Capital & Income Fund, Inc.]]>

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM N-Q

QUARTERLY SCHEDULE OF PORTFOLIO HOLDINGS OF REGISTERED

MANAGEMENT INVESTMENT COMPANY

Investment Company Act file number 811-21506

Name of Fund: BlackRock Enhanced Capital and Income Fund, Inc. (CII)

Fund Address: 100 Bellevue Parkway, Wilmington, DE 19809

Name and address of agent for service: John M. Perlowski, Chief Executive Officer, BlackRock Enhanced

Capital and Income Fund, Inc., 55 East 52nd Street, New York, NY 10055

Registrant’s telephone number, including area code: (800) 882-0052, Option 4

Date of fiscal year end: 10/31/2013

Date of reporting period: 01/31/2013

Item 1 – Schedule of Investments

 

 

Schedule of Investments January 31, 2013

(Unaudited)

  

 

BlackRock Enhanced Capital and Income Fund, Inc. (CII)

(Percentages shown are based on Net Assets)

 

Common Stocks    Shares      Value  

 

  

Aerospace & Defense – 2.6%

      

Northrop Grumman Corp.

      133,000       $ 8,650,320   

Raytheon Co. (a)

      148,200         7,807,176   
     

 

 

  
        16,457,496   

 

  

Automobiles – 0.7%

      

Ford Motor Co. (a)

      348,000         4,506,600   

 

  

Beverages – 1.2%

      

PepsiCo, Inc. (a)

      107,100         7,802,235   

 

  

Capital Markets – 1.9%

      

Invesco Ltd.

      437,000         11,908,250   

 

  

Chemicals – 4.3%

      

CF Industries Holdings, Inc. (a)

      117,500         26,927,475   

 

  

Commercial Banks – 4.0%

      

U.S. Bancorp

      190,700         6,312,170   

Wells Fargo & Co. (a)

      540,600         18,829,098   
     

 

 

  
        25,141,268   

 

  

Computers & Peripherals – 2.8%

  

   

Apple, Inc. (a)

      39,600         18,030,276   

 

  

Diversified Financial Services – 4.3%

      

Citigroup, Inc. (a)

      186,330         7,855,673   

JPMorgan Chase & Co. (a)

      416,700         19,605,735   
     

 

 

  
        27,461,408   

 

  

Diversified Telecommunication Services – 4.8%

  

AT&T Inc.

      365,100         12,701,829   

CenturyLink, Inc. (a)

      444,000         17,959,800   
     

 

 

  
        30,661,629   

 

  

Electric Utilities – 2.9%

      

NextEra Energy, Inc.

      119,900         8,638,795   

The Southern Co.

      221,900         9,814,637   
     

 

 

  
        18,453,432   

 

  

Energy Equipment & Services – 3.9%

  

Ensco Plc, Class A (a)

      153,000         9,726,210   

Halliburton Co.

      132,600         5,394,168   

Noble Corp. (a)

      240,800         9,752,400   
     

 

 

  
        24,872,778   

 

  

Food Products – 3.7%

      

Archer-Daniels-Midland Co. (a)

      223,000         6,362,190   

Unilever NV

      416,100         16,843,728   
     

 

 

  
        23,205,918   

 

  

Health Care Equipment & Supplies – 1.9%

  

Medtronic, Inc.

      256,000         11,929,600   

 

  

Health Care Providers & Services – 0.7%

  

Express Scripts Holding Co. (a)(b)

      84,000         4,487,280   

 

  

Household Products – 3.6%

      

Kimberly-Clark Corp.

      174,900         15,655,299   

The Procter & Gamble Co. (a)

      92,200         6,929,752   
     

 

 

  
        22,585,051   

 

  
Common Stocks    Shares      Value  

 

  

Industrial Conglomerates – 3.0%

      

General Electric Co. (a)

      840,100       $ 18,717,428   

 

  

Insurance – 4.7%

      

Aflac, Inc.

      32,200         1,708,532   

American International Group, Inc. (a)(b)

      88,700         3,355,521   

Berkshire Hathaway, Inc., Class B (a)(b)

      50,600         4,904,658   

Hartford Financial Services Group, Inc. (a)

      168,700         4,183,760   

MetLife, Inc. (a)

      214,300         8,001,962   

Prudential Financial, Inc. (a)

      49,000         2,836,120   

The Travelers Cos., Inc.

      62,500         4,903,750   
     

 

 

  
        29,894,303   

 

  

Internet Software & Services – 7.3%

      

Google, Inc., Class A (a)(b)

      39,900         30,152,031   

Yahoo!, Inc. (a)(b)

      829,900         16,290,937   
     

 

 

  
        46,442,968   

 

  

IT Services – 0.5%

      

Saic, Inc. (a)

      265,000         3,206,500   

 

  

Media – 4.8%

      

Comcast Corp., Special Class A (a)

      289,300         10,625,989   

Time Warner, Inc. (a)

      270,100         13,645,452   

The Walt Disney Co.

      113,600         6,120,768   
     

 

 

  
        30,392,209   

 

  

Metals & Mining – 1.0%

      

Freeport-McMoRan Copper & Gold, Inc. (a)

      184,700         6,510,675   

 

  

Multi-Utilities – 2.0%

      

Dominion Resources, Inc.

      185,900         10,059,049   

Public Service Enterprise Group, Inc.

      88,000         2,743,840   
     

 

 

  
        12,802,889   

 

  

Oil, Gas & Consumable Fuels – 13.0%

      

Chevron Corp.

      157,300         18,113,095   

Exxon Mobil Corp. (a)

      176,000         15,834,720   

HollyFrontier Corp. (a)

      175,700         9,175,054   

Marathon Oil Corp. (a)

      184,500         6,201,045   

Marathon Petroleum Corp.

      85,400         6,337,534   

Suncor Energy, Inc.

      788,800         26,834,976   
     

 

 

  
        82,496,424   

 

  

Pharmaceuticals – 10.1%

      

Eli Lilly & Co.

      132,600         7,119,294   

Johnson & Johnson (a)

      182,600         13,497,792   

Merck & Co., Inc.

      468,800         20,275,600   

Pfizer, Inc. (a)

      855,100         23,327,128   
     

 

 

  
        64,219,814   

 

  

Real Estate Investment Trusts (REITs) – 1.2%

  

Annaly Capital Management, Inc. (a)

      516,300         7,677,381   

 

  

Semiconductors & Semiconductor Equipment – 3.1%

  

QUALCOMM, Inc.

      293,900         19,406,217   

 

  

Specialty Retail – 1.0%

      

Limited Brands, Inc.

      134,600         6,463,492   

 

  
 

 

 

 

 

    Portfolio Abbreviations

            

 

To simplify the listings of portfolio holdings in the Schedule of Investments, the names and descriptions of many securities have been abbreviated according to the following list:   ADR    American Depositary Receipt    USD    US Dollar

 

                 
        JANUARY 31, 2013    1

  

 

Schedule of Investments (continued)

   

 

BlackRock Enhanced Capital and Income Fund, Inc. (CII)

 

Common Stocks    Shares      Value  

 

  

Wireless Telecommunication Services – 4.3%

  

   

Vodafone Group Plc - ADR

      1,004,000       $ 27,429,280   

 

  

Total Long-Term Investments

(Cost – $582,404,988) – 99.3%

         630,090,276   

 

  
     
     

 

Short-Term Securities

      

 

  

BlackRock Liquidity Funds, TempFund, Institutional Class, 0.10% (c)(d)

      19,217,352         19,217,352   

 

  

Total Short-Term Securities

(Cost – $19,217,352) – 3.0%

         19,217,352   

 

  
      Value  

 

  

Total Investments Before Options Written

(Cost – $601,622,340*) – 102.3%

    $ 649,307,628   

 

  
  
  

 

Options Written

   

 

  

(Premiums Received – $7,205,346) – (1.8)%

      (11,497,875 ) 

 

  

Total Investments Net of Options
Written – 100.5%

      637,809,753   

Liabilities in Excess of Other Assets – (0.5)%

      (3,260,907 ) 
  

 

 

  

Net Assets – 100.0%

    $ 634,548,846   
  

 

 

  
 

 

 

    Notes to Schedule of Investments

 

* As of January 31, 2013, gross unrealized appreciation and gross unrealized depreciation based on cost for federal income tax purposes were as follows:

 

Tax cost

    $ 688,756,342   
  

 

 

  

 

Gross unrealized appreciation

    $ 53,574,781   

Gross unrealized depreciation

      (93,023,495 ) 
  

 

 

  

 

Net unrealized depreciation

    $ (39,448,714 ) 
  

 

 

  

 

(a) All or a portion of security has been pledged/segregated as collateral in connection with outstanding options written.
(b) Non-income producing security.
(c) Represents the current yield as of report date.
(d) Investments in issuers considered to be an affiliate of the Trust during the period ended January 31, 2013, for purposes of Section 2(a)(3) of the Investment Company Act of 1940, as amended, were as follows:

 

  
Affiliate   

Shares

Held at

October 31,

2012

    Net
Activity		  

Shares

Held at

January 31,

2013

    Income     

Realized

Gain

  

 

  

BlackRock Liquidity Funds, TempFund, Institutional Class

    23,189,440    (3,972,088)   19,217,352    $ 10,848         $347   

 

  

 

—  

Exchange-Traded options written as of January 31, 2013 were as follows:

 

  
Description   

Put/

Call

   

Strike

Price

     

Expiration

Date

    Contracts     

Market

Value

  

 

  

Comcast Corp., Special Class A

    Call      USD         35.75       2/06/13      560       $ (57,091 ) 

Ford Motor Co.

    Call      USD         14.50       2/16/13      110         (37 ) 

Marathon Oil Corp.

    Call      USD         32.75       2/16/13      510         (61,836 ) 

Annaly Capital Management, Inc.

    Call      USD         15       2/18/13      1,800         (21,600 ) 

Archer-Daniels-Midland Co.

    Call      USD         29       2/18/13      1,225         (43,488 ) 

Berkshire Hathaway, Inc., Class B

    Call      USD         95       2/18/13      280         (64,540 ) 

Express Scripts Holding Co.

    Call      USD         57.50       2/18/13      460         (4,140 ) 

Freeport-McMoRan Copper & Gold, Inc.

    Call      USD         36       2/18/13      1,015         (37,048 ) 

General Electric Co.

    Call      USD         22       2/18/13      529         (24,070 ) 

Google, Inc., Class A

    Call      USD         730       2/18/13      135         (386,775 ) 

Google, Inc., Class A

    Call      USD         735       2/18/13      87         (210,540 ) 

HollyFrontier Corp.

    Call      USD         46       2/18/13      965         (607,950 ) 

JPMorgan Chase & Co.

    Call      USD         44       2/18/13      1,305         (411,075 ) 

The Limited, Inc.

    Call      USD         45       2/18/13      250         (80,000 ) 

Noble Corp.

    Call      USD         40       2/18/13      660         (83,820 ) 

Noble Corp.

    Call      USD         41       2/18/13      660         (53,460 ) 

PepsiCo, Inc.

    Call      USD         72.50       2/18/13      235         (24,322 ) 

The Procter & Gamble Co.

    Call      USD         70       2/18/13      507         (263,640 ) 

Prudential Financial, Inc.

    Call      USD         60       2/18/13      170         (9,350 ) 

 

                 
2         JANUARY 31, 2013   

  

 

Schedule of Investments (continued)

   

 

BlackRock Enhanced Capital and Income Fund, Inc. (CII)

 

—  

Exchange-Traded options written as of January 31, 2013 were as follows: (concluded)

 

  
Description    Put/
Call		   

Strike

Price

      Expiration
Date		    Contracts      Market
Value		  

 

  

Raytheon Co.

    Call      USD         57.50       2/18/13      815       $ (2,445 ) 

Yahoo!, Inc.

    Call      USD         20       2/18/13      2,715         (57,015 ) 

Citigroup, Inc.

    Call      USD         43       2/22/13      200         (11,000 ) 

Ford Motor Co.

    Call      USD         14.50       2/22/13      1,915         (6,702 ) 

Saic, Inc.

    Call      USD         12.25       3/16/13      1,325         (26,719 ) 

American International Group, Inc.

    Call      USD         38       3/18/13      440         (53,460 ) 

Annaly Capital Management, Inc.

    Call      USD         15       3/18/13      500         (12,250 ) 

Apple, Inc.

    Call      USD         465       3/18/13      198         (210,375 ) 

CenturyLink, Inc.

    Call      USD         41       3/18/13      700         (26,250 ) 

CF Industries Holdings, Inc.

    Call      USD         225       3/18/13      705         (764,925 ) 

Citigroup, Inc.

    Call      USD         42       3/18/13      1,025         (158,875 ) 

Comcast Corp., Special Class A

    Call      USD         39       3/18/13      1,030         (23,175 ) 

Ensco Plc, Class A

    Call      USD         62.50       3/18/13      840         (222,600 ) 

Hartford Financial Services Group, Inc.

    Call      USD         26       3/18/13      500         (25,750 ) 

JPMorgan Chase & Co.

    Call      USD         47       3/18/13      470         (60,395 ) 

The Limited, Inc.

    Call      USD         49       3/18/13      490         (58,800 ) 

Marathon Oil Corp.

    Call      USD         34       3/18/13      505         (42,925 ) 

MetLife, Inc.

    Call      USD         36       3/18/13      222         (44,067 ) 

MetLife, Inc.

    Call      USD         38       3/18/13      955         (84,518 ) 

Prudential Financial, Inc.

    Call      USD         60       3/18/13      153         (14,152 ) 

Wells Fargo & Co.

    Call      USD         35       3/18/13      2,640         (182,160 ) 

General Electric Co.

    Call      USD         22.05       3/22/13      690         (37,778 ) 

Johnson & Johnson

    Call      USD         73       3/25/13      540         (80,472 ) 

Exxon Mobil Corp.

    Call      USD         90.90       3/26/13      650         (92,239 ) 

Time Warner, Inc.

    Call      USD         50.60       3/26/13      1,070         (152,595 ) 

PepsiCo, Inc.

    Call      USD         73.40       4/02/13      355         (32,239 ) 

Pfizer, Inc.

    Call      USD         27.85       4/04/13      955         (31,840 ) 

MetLife, Inc.

    Call      USD         38       4/22/13      237         (31,876 ) 

 

  

 

Total

                   $ (4,992,379 ) 
                 

 

 

  

 

—  

Over-the-counter options written as of January 31, 2013 were as follows:

 

  
Description    Counterparty    Put/
Call		   

Strike

Price

      Expiration
Date		    Contracts      Market
Value		  

 

  
AT&T Inc.    Morgan Stanley & Co., Inc.    Call    USD      34.08       2/04/13      100,500       $ (71,355 ) 
JPMorgan Chase & Co.    Goldman Sachs & Co.    Call    USD      41.65       2/04/13      25,000         (135,000 ) 
NextEra Energy, Inc.    Morgan Stanley & Co., Inc.    Call    USD      68.26       2/04/13      42,500         (161,075 ) 
Pfizer, Inc.    Morgan Stanley & Co., Inc.    Call    USD      24.35       2/04/13      192,500         (564,025 ) 
Unilever NV    Citigroup Global Markets, Inc.    Call    USD      36.79       2/04/13      64,000         (235,904 ) 
Yahoo!, Inc.    Deutsche Bank Securities Corp.    Call    USD      19.17       2/05/13      185,000         (94,325 ) 
U.S. Bancorp    Morgan Stanley & Co., Inc.    Call    USD      32.05       2/07/13      125,900         (133,456 ) 
Exxon Mobil Corp.    Credit Suisse First Boston    Call    USD      89.95       2/08/13      32,000         (26,252 ) 
Halliburton Co.    Banc of America Securities    Call    USD      34.73       2/08/13      72,900         (433,755 ) 
Merck & Co., Inc.    Morgan Stanley & Co., Inc.    Call    USD      44.84       2/08/13      54,500         (1,566 ) 
Public Service Enterprise Group, Inc.    Credit Suisse First Boston    Call    USD      30.61       2/08/13      48,000         (27,211 ) 
AT&T Inc.    Morgan Stanley & Co., Inc.    Call    USD      34.08       2/11/13      100,500         (81,607 ) 
CenturyLink, Inc.    UBS Securities LLC    Call    USD      38.66       2/11/13      106,700         (190,993 ) 
Hartford Financial Services Group, Inc.    Citigroup Global Markets, Inc.    Call    USD      23.87       2/11/13      63,800         (73,452 ) 
JPMorgan Chase & Co.    Goldman Sachs & Co.    Call    USD      41.65       2/11/13      25,000         (135,000 ) 
JPMorgan Chase & Co.    Morgan Stanley & Co., Inc.    Call    USD      43.46       2/11/13      47,600         (170,884 ) 
Vodafone Group Plc - ADR    Morgan Stanley & Co., Inc.    Call    USD      26.24       2/11/13      120,100         (129,708 ) 

 

                 
        JANUARY 31, 2013    3

  

 

Schedule of Investments (continued)

   

 

BlackRock Enhanced Capital and Income Fund, Inc. (CII)

 

—  

Over-the-counter options written as of January 31, 2013 were as follows: (concluded)

 

  
Description    Counterparty    Put/
Call		   

Strike

Price

      Expiration
Date		    Contracts      Market
Value		  

 

  

Dominion Resources, Inc.

    Credit Suisse First Boston    Call      USD         54.21       2/22/13      52,000       $ (26,994 ) 

Wells Fargo & Co.

    Citigroup Global Markets, Inc.    Call      USD         34.90       2/22/13      93,000         (38,441 ) 

CenturyLink, Inc.

    Citigroup Global Markets, Inc.    Call      USD         39.94       2/25/13      69,200         (57,598 ) 

General Electric Co.

    Morgan Stanley & Co., Inc.    Call      USD         21.25       2/25/13      340,000         (370,718 ) 

Unilever NV

    Goldman Sachs & Co.    Call      USD         38.51       2/25/13      37,000         (72,890 ) 

The Walt Disney Co.

    Credit Suisse First Boston    Call      USD         49.86       2/25/13      62,500         (265,308 ) 

Eli Lilly & Co.

    Credit Suisse First Boston    Call      USD         53.34       2/28/13      73,000         (78,337 ) 

Unilever NV

    Goldman Sachs & Co.    Call      USD         38.89       3/04/13      37,000         (58,830 ) 

Unilever NV

    UBS Securities LLC    Call      USD         38.66       3/04/13      91,000         (165,620 ) 

Aflac, Inc.

    Credit Suisse First Boston    Call      USD         53.94       3/05/13      21,200         (21,179 ) 

Merck & Co., Inc.

    Goldman Sachs & Co.    Call      USD         42.51       3/07/13      203,500         (266,862 ) 

NextEra Energy, Inc.

    Goldman Sachs & Co.    Call      USD         71.36       3/07/13      23,500         (33,022 ) 

Time Warner, Inc.

    Morgan Stanley & Co., Inc.    Call      USD         49.49       3/07/13      41,300         (82,597 ) 

Dominion Resources, Inc.

    Morgan Stanley & Co., Inc.    Call      USD         52.86       3/08/13      50,200         (80,396 ) 

Kimberly-Clark Corp.

    Citigroup Global Markets, Inc.    Call      USD         86.51       3/08/13      69,200         (225,977 ) 

Chevron Corp.

    Morgan Stanley & Co., Inc.    Call      USD         116.35       3/11/13      86,500         (154,281 ) 

Vodafone Group Plc - ADR

    Citigroup Global Markets, Inc.    Call      USD         26.11       3/11/13      211,000         (265,875 ) 

QUALCOMM, Inc.

    Morgan Stanley & Co., Inc.    Call      USD         65.96       3/14/13      161,700         (276,484 ) 

Southern Co.

    Goldman Sachs & Co.    Call      USD         43.76       3/14/13      61,000         (47,670 ) 

The Travelers Cos., Inc.

    Morgan Stanley & Co., Inc.    Call      USD         76.76       3/14/13      41,300         (92,719 ) 

Invesco Ltd.

    Deutsche Bank Securities Corp.    Call      USD         28.13       3/21/13      48,800         (10,982 ) 

Marathon Petroleum Corp.

    Morgan Stanley & Co., Inc.    Call      USD         68.25       3/25/13      47,000         (314,929 ) 

Medtronic, Inc.

    Credit Suisse First Boston    Call      USD         46.26       3/25/13      141,000         (206,880 ) 

Northrop Grumman Corp.

    Morgan Stanley & Co., Inc.    Call      USD         68.78       3/25/13      73,000         (23,391 ) 

Suncor Energy, Inc.

    Citigroup Global Markets, Inc.    Call      USD         34.74       3/26/13      203,500         (171,318 ) 

Pfizer, Inc.

    Credit Suisse First Boston    Call      USD         27.27       3/27/13      182,200         (99,381 ) 

Kimberly-Clark Corp.

    Credit Suisse First Boston    Call      USD         87.08       4/01/13      26,900         (78,310 ) 

Invesco Ltd.

    Goldman Sachs & Co.    Call      USD         28.46       4/02/13      239,500         (74,110 ) 

Southern Co.

    Jefferies & Co., Inc.    Call      USD         44.25       4/02/13      610         (38,303 ) 

Suncor Energy, Inc.

    Morgan Stanley & Co., Inc.    Call      USD         34.78       4/05/13      112,000         (103,684 ) 

Johnson & Johnson

    Morgan Stanley & Co., Inc.    Call      USD         74.94       4/11/13      46,400         (36,842 ) 

 

  

 

Total

                      $ (6,505,496 ) 
                    

 

 

  

 

—  

For Trust compliance purposes, the Trust’s industry classifications refer to any one or more of the industry sub-classifications used by one or more widely recognized market indexes or ratings group indexes, and/or as defined by Trust management. These definitions may not apply for purposes of this report, which may combine industry sub-classifications for reporting ease.

 

—  

Fair Value Measurements – Various inputs are used in determining the fair value of investments and derivative financial instruments. These inputs to valuation techniques are categorized into a disclosure hierarchy consisting of three broad levels for financial reporting purposes as follows:

 

  —  

Level 1 - unadjusted price quotations in active markets/exchanges for identical assets and liabilities that the Trust has the ability to access

 

  —  

Level 2 - other observable inputs (including, but not limited to, quoted prices for similar assets or liabilities in markets that are active, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the assets or liabilities (such as interest rates, yield curves, volatilities, prepayment speeds, loss severities, credit risks and default rates) or other market-corroborated inputs)

 

  —  

Level 3 - unobservable inputs based on the best information available in the circumstances, to the extent observable inputs are not available (including the Trust’s own assumptions used in determining the fair value of investments and derivative financial instruments)

 

The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). Accordingly, the degree of judgment exercised in determining fair value is greatest for instruments categorized in Level 3. The inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, for disclosure purposes, the level in the fair value hierarchy within which the fair value measurement falls in its entirety is determined based on the lowest level input that is significant to the fair value measurement in its entirety.

 

                 
4         JANUARY 31, 2013   

  

 

Schedule of Investments (concluded)

   

 

BlackRock Enhanced Capital and Income Fund, Inc. (CII)

 

Changes in valuation techniques may result in transfers into or out of an assigned level within the disclosure hierarchy. In accordance with the Trust’s policy, transfers between different levels of the fair value disclosure hierarchy are deemed to have occurred as of the beginning of the reporting period. The categorization of a value determined for investments and derivative financial instruments is based on the pricing transparency of the investment and derivative financial instrument and is not necessarily an indication of the risks associated with investing in those securities. For information about the Trust’s policy regarding valuation of investments and derivative financial instruments and other significant accounting policies, please refer to the Trust’s most recent financial statements as contained in its annual report

The following tables summarize the Trust’s investments and derivative financial instruments categorized in the disclosure hierarchy as of January 31, 2013:

 

      Level 1     Level 2     Level 3    Total  

Assets:

          

Investments:

          

Long-Term Investments:

          

Common Stocks1

    $ 630,090,276        –      –    $ 630,090,276   

Short-Term Securities

      19,217,352        –      –      19,217,352   

Total

    $ 649,307,628        –      –    $ 649,307,628   

1 See above Schedule of Investments for values in each industry.

 

  

      Level 1     Level 2     Level 3    Total  

Derivative Financial Instruments2

          

Liabilities:

          

Equity contracts

    $ (4,419,533 )    $ (7,078,342 )    –    $ (11,497,875 ) 

Total

    $ (4,419,533 )    $ (7,078,342 )    –    $ (11,497,875 ) 

2 Derivative financial instruments are options written, which are shown at value.

  

Certain of the Trust’s assets and liabilities are held at carrying amount, which approximates fair value for financial reporting purposes. As of January 31, 2013, such assets and liabilities are categorized within the disclosure hierarchy as follows:

 

   

      Level 1     Level 2     Level 3    Total  

Assets:

          

Foreign currency at value

    $ 5,684        –      –    $ 5,684   

Cash pledged as collateral for options written

      1,300,000        –      –      1,300,000   

Liabilities:

          

Bank overdraft

      –      $ (2,509 )    –      (2,509 ) 

Total

    $ 1,305,684      $ (2,509 )    –    $ 1,300,666   

There were no transfers between levels during the period ended January 31, 2013.

 

                 
        JANUARY 31, 2013    5

Item 2 – Controls and Procedures

 

2(a) –    The registrant’s principal executive and principal financial officers, or persons performing similar functions, have concluded that the registrant’s disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940, as amended (the “1940 Act”)) are effective as of a date within 90 days of the filing of this report based on the evaluation of these controls and procedures required by Rule 30a-3(b) under the 1940 Act and Rule 13a-15(b) under the Securities Exchange Act of 1934, as amended.
2(b) –    There were no changes in the registrant’s internal control over financial reporting (as defined in Rule 30a-3(d) under the 1940 Act) that occurred during the registrant’s last fiscal quarter that have materially affected, or are reasonably likely to materially affect, the registrant’s internal control over financial reporting.
Item 3 –    Exhibits
   Certifications – Attached hereto

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

BlackRock Enhanced Capital and Income Fund, Inc.

 

By:  

  /s/ John M. Perlowski

  John M. Perlowski
  Chief Executive Officer (principal executive officer) of
  BlackRock Enhanced Capital and Income Fund, Inc.

Date: March 26, 2013

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

 

By:  

  /s/ John M. Perlowski

  John M. Perlowski
  Chief Executive Officer (principal executive officer) of
  BlackRock Enhanced Capital and Income Fund, Inc.

Date: March 26, 2013

 

By:  

  /s/ Neal J. Andrews

  Neal J. Andrews
  Chief Financial Officer (principal financial officer) of
  BlackRock Enhanced Capital and Income Fund, Inc.

Date: March 26, 2013