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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November 8, 2019

SEC Proposes Updates to Filing Fee Disclosure and Payment Methods

On October 24, 2019, the SEC issued a release proposing amendments to various rules and forms under the 1933 Act, 1934 Act and 1940 Act (Release) applicable to investment companies registered under the 1940 Act (funds). The amendments would, among other things, require filing fee disclosures under Forms N-2, N-5…

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October 24, 2019

Compliance and Effective Dates Set for New Exchange-Traded Funds Rule

On October 24, 2019, the SEC’s adopting release (Release) for Rule 6c-11 (Rule) under the Investment Company Act of 1940, as amended (1940 Act), to modernize the regulatory framework for most exchange-traded funds (ETFs) was published in the Federal Register, which means that the various compliance and effective dates for…

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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 8, 2019

Division of Investment Management Issues ADI on Performance and Fee Issues

On October 2, 2019, the Disclosure Review and Accounting Office (“DRAO”) of the SEC’s Division of Investment Management (the “Division”) issued Accounting and Disclosure Information (“ADI”) 2019-09 on “Performance and Fee Issues.” The ADI provides the DRAO staff’s observations from reviewing fund disclosure filings with the…

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October 1, 2019

SEC Adopts New Rule for Exchange-Traded Funds

On September 25, 2019, the SEC adopted Rule 6c-11 (Rule) under the Investment Company Act of 1940, as amended (1940 Act), to modernize the regulatory framework for most exchange-traded funds (ETFs).  The Rule eliminates the need for ETFs that can operate under its conditions to obtain an exemptive order from…

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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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September 23, 2019

Advisers Fined $5 Million for Disclosure and Compliance Violations Related to Securities Lending and Unreimbursed Tax Expenses for Mutual Fund Clients

On September 16, 2019, the SEC issued a settled order describing violations of the Investment Advisers Act of 1940 (“Advisers Act”) and rules thereunder by two registered advisers for undisclosed conflicts of interest and misleading disclosures relating to certain securities lending practices, and misleading disclosures and deficient policies and procedures…

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September 16, 2019

SEC Charges BDC Adviser with Affiliated Transaction Violations and Noncompliance with Co-Investment Exemptive Order

On September 13, 2019, the SEC issued a consent order that named Garrison Investment Group LP (“GIG”) and Garrison Capital Advisers LLC (“GCA”) and found violations of the affiliated transaction prohibitions of the Investment Company Act of 1940 (“1940 Act”) and the custody rule under the Investment Advisers Act of…

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