March 26, 2020

SEC Provides Temporary Additional Borrowing Flexibility to Registered Investment Companies Affected by Coronavirus

On March 23, 2020, the SEC issued an order (1940 Act Borrowing Order) providing for temporary additional borrowing flexibility to certain registered investment companies (funds) affected by the outbreak of COVID-19 (Coronavirus).  The 1940 Act Borrowing Order provides exemptions from certain requirements of the Investment Company Act of 1940 (1940…

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March 26, 2020

SEC Provides Revised Relief to Assist Registered Funds Affected by the Coronavirus

On March 25, 2020, the SEC issued a revised order superseding a prior order from March 13, 2020 providing relief from certain provisions of the 1940 Act for registered investment companies (funds) whose operations may be affected by the coronavirus (1940 Act Order). The 1940 Act Order addresses: (i) the in-person…

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March 25, 2020

SEC Staff Grants Temporary Relief to Support Money Market Funds

On March 19, 2020, the SEC staff (Staff) issued a no-action letter to the Investment Company Institute (ICI Letter) that provides relief to money market funds (MMFs).  In the ICI Letter, the Staff will permit an affiliated person of an MMF (or an affiliated person of such person) that is…

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March 12, 2020

Broker-Dealer Entities Fined $35 Million for Violations Relating to Inverse ETF Recommendations to Retail Investors

The SEC recently fined two dual registrant broker-dealers $35 million for violations involving inadequate compliance policies and procedures, unsuitable recommendations and failure to supervise arising out of recommendations to certain retail investors that invested in single-inverse ETFs. Single-inverse ETFs are ETFs that seek returns that are the opposite of the…

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March 9, 2020

SEC Requests Comment on Fund Names Rule; Seeks to Eliminate Misleading Fund Names

On March 2, 2020, the SEC published a release seeking public comment on current requirements that restrict the use of potentially misleading fund names (principally, Rule 35d-1 under the 1940 Act (Names Rule)). The release notes that fund names are often the first piece of information investors see and that…

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November 18, 2019

SEC’s Office of Compliance Inspections and Examinations Issues Risk Alert to Provide Observations from Examinations of Investment Companies and Observations from Money Market Fund and Target Date Fund Examination Initiatives

On November 7, 2019, the staff of the SEC’s Office of Compliance Inspections and Examinations (staff) issued a risk alert (Risk Alert) on the most frequently cited deficiencies and weaknesses that the staff has observed in recent examinations of registered investment companies. The Risk Alert also provides staff observations from national examination initiatives relating to money market funds and target date funds.

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October 23, 2019

SEC Staff Issues Frequently Asked Questions Regarding Disclosure of Certain Financial Conflicts Related to Investment Adviser Compensation

On October 18, 2019, the SEC staff issued frequently asked questions (FAQ) about required disclosures of conflicts related to compensation advisers receive, such as 12b-1 fees and revenue sharing, for recommending certain investment products. In the FAQ, the staff of the Division of Investment Management discusses…

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October 23, 2019

SEC Proposes Amendments to Exemptive Applications Procedures

On October 18, 2019, the SEC proposed rule amendments to establish an expedited review procedure for exemptive applications under the Investment Company Act of 1940 that are substantially identical to recent precedent, as well as a new informal internal procedure for applications that would not qualify for the new expedited…

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October 21, 2019

SEC Staff Publishes Responses to Inquiries Regarding Business Development Companies and Section 61(a) of the Investment Company Act of 1940

On October 18, 2019, the SEC staff (the “Staff”) published responses to interpretive questions received related to Section 61(a) of the Investment Company Act of 1940 (the “1940 Act”), which applies the leverage limitations under Section 18 of the 1940 Act to business development companies (“BDCs”). Section 61(a) of the…

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October 1, 2019

SEC Orders an Additional 16 Self-Reporting Advisory Firms to Pay Nearly $10 Million to Investors

On September 30, 2019, the SEC announced it settled charges against 17 investment advisers for disclosure failures regarding their mutual fund share class selection practices. The firms include 16 advisers that self-reported as part of the Division of Enforcement’s Share Class Selection Disclosure Initiative (Initiative) and one adviser that did…

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