As discussed in a recent S&K ’40 Act Blog Post, the staff of the SEC’s Division of Investment Management (staff) published a FAQ regarding the newly adopted Rule 2-a5 (Valuation Rule).
The staff recently added a new response to the FAQ that confirms that funds are not required to comply with the Valuation Rule’s definition of “readily available market quotations” with respect to cross trades undertaken in reliance on Rule 17a-7 until the rule’s compliance date (September 8, 2022). The response also states that the staff would not object if a fund voluntarily complies with the Valuation Rule prior to the compliance date but does not apply the new definition of “readily available market quotations” provided in the Valuation Rule to cross trades undertaken in reliance on Rule 17a-7 under the 1940 Act until the compliance date.
S&K will continue to provide updates on developments regarding the Valuation Rule. For more information on the Valuation Rule, please visit this S&K Memo.