July 8, 2020

Registered Fund Adviser and Affiliate Censured and Fined for Violations of Section 12(d)(1)(A) (Fund of Funds Limitations) and Compliance Rules

On July 2, 2020, the SEC entered into a settlement order with an adviser and its foreign affiliate (Order) involving violations of the fund-of-funds ownership restrictions in Section 12(d)(1)(A) of the 1940 Act and the compliance rules contained in Rule 38a-1 under the 1940 Act and Rule 206(4)-7 under the Advisers…

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June 26, 2020

Department of Labor Proposes Rule Affecting ESG Plan Investments

On June 23, 2020, the U.S. Department of Labor (DOL) proposed a rule intended to clarify ERISA plan fiduciaries’ responsibilities with respect to environmental, social and governance (ESG) investing. The proposal is designed in part to make clear that ERISA plan fiduciaries may not invest in ESG vehicles when they…

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June 23, 2020

SEC Extends In-Person Meeting Relief for Fund Boards

On June 19, 2020, the SEC issued an exemptive order that superseded a prior order issued on March 25, 2020 (Prior Order) that provided funds and business development companies (BDCs) relief from the in-person board meeting requirements of the 1940 Act and certain rules thereunder as a result of the…

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June 16, 2020

Federal Reserve Announces Updates to Secondary Market Corporate Credit Facility

Federal Reserve Announces Updates to Secondary Market Corporate Credit Facility On June 15, 2020, the Federal Reserve (Fed) announced updates and released an updated term sheet relating to the Secondary Market Corporate Credit Facility (SMCCF). The Federal Reserve Bank of New York will begin buying eligible corporate bonds issued…

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June 4, 2020

SEC Staff Issues No-Action Letter for Funds Participating in TALF 2020

On May 27, 2020, in a letter addressed to the Investment Company Institute (ICI) and the Securities Industry and Financial Markets Association (SIFMA), the SEC staff (Staff) provided no-action relief (ICI/SIFMA Letter) to address 1940 Act considerations for funds seeking to participate in the Federal Reserve Board’s (Fed) Term Asset-Backed…

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June 2, 2020

CFTC Issues Customer Advisory Regarding Commodity ETPs and Funds

Recently, the CFTC issued a customer advisory (Advisory) in response to increased investor interest in exchange-traded products (ETPs) and funds that invest in futures or other types of commodity interests (collectively, Pools). The Advisory highlights the distinctions between ETPs and funds that invest in securities and Pools, which include the…

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June 2, 2020

SEC Staff Withdraws Prior No-Action Guidance on State Control Share Acquisition Statutes

On May 27, 2020, the SEC staff (Staff) issued a statement (Statement) withdrawing a prior no-action letter (Boulder Total Return Fund, SEC No-Action Letter (Nov. 15, 2010) (Boulder)) addressing certain aspects of the intersection of the voting requirements of Section 18(i) of the 1940 Act and state control share acquisition…

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May 22, 2020

FINRA Issues Notice Reminding Firms of Sales Practice Obligations for Certain Exchange-Traded Products

On May 15, 2020, FINRA issued Regulatory Notice 20-14 (Notice) in response to recent “extraordinary conditions” that have caused significant volatility in complex oil-linked exchange-traded products (ETPs). The Notice reminds broker-dealers that are members of FINRA (firms) of their sales practice obligations in connection with these ETPs and, similar to…

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May 21, 2020

SEC Charges Three Former Audit Firm Partners for Exam Sharing Misconduct

On May 18, 2020, the SEC entered into settlement agreements with three former partners of an independent public accounting firm (Firm) in connection with the partners’ conduct involving improperly receiving and sharing information about internal continuing professional education exams conducted by the Firm. The former partners participated in soliciting or…

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May 15, 2020

ETF Sponsors Submit Letters to Major Exchanges Regarding ETP Categorization

On May 13, 2020, a group of six ETF sponsors submitted letters to Cboe Global Markets, Inc., NASDAQ, and Intercontinental Exchange Inc. (the parent of NYSE Arca) urging that each exchange adopt exchange listing rules or other means to categorize exchange-traded products (ETPs) differently (ETP Letter).  The ETP Letter proposes…

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