May 26, 2021

NYSE Arca Receives Approval for Proposed Rule Change to Exempt Funds from Shareholder Approval Requirements in Connection with Certain Acquisitions

On May 14, 2021, the NYSE Arca, Inc. (NYSE Arca) received approval from the SEC to implement a proposed rule change to exclude certain listed funds, including ETFs, from a requirement in NYSE Arca’s corporate governance rules (Rule 5.3-E(d)(9)) to obtain shareholder approvals for the issuance of securities…

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April 28, 2021

SEC Publishes New FAQ on Form N-CEN

The staff of the SEC’s Division of Investment Management (Staff) maintains FAQs regarding the SEC’s fund reporting modernization reforms adopted in October 2016 and revised in December 2017 and January 2019. The FAQs address compliance dates and general filing obligations, Regulation S-X and Forms N-PORT and N-CEN.

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April 6, 2021

SEC Withdraws and Modifies Certain Staff Letters in Light of Rule 18f-4

On November 2, 2020, the SEC adopted rule 18f-4 under the 1940 Act which will permit a registered investment company or business development company (fund) to enter into derivatives and certain other transactions notwithstanding the restrictions under Sections 18 and 61 of the 1940 Act, provided that the…

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March 24, 2021

SEC Publishes New FAQ on Valuation Rule

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…

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March 15, 2021

SEC Issues Statement on Investment Company Cross Trading Practices Potentially Impacted by the Valuation Rule

Under Rule 17a-7 under the 1940 Act, a fund may effect transactions with certain affiliates (cross trades), so long as the cross trades satisfy the conditions of the rule. Generally, among other things, the rule requires that cross trades (i) involve a security for which “market quotations are readily available”…

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March 15, 2021

Additional Semi-Transparent ETF Sponsor Receives Amended Exemptive Relief to Use “Custom Baskets”

The SEC recently granted amended exemptive relief for Blue Tractor, a sponsor of semi-transparent ETFs (ST ETFs), to permit ST ETFs that rely on Blue Tractor’s relief to create and redeem creation units with authorized participants (APs) in exchange for “custom baskets” (Amended Relief). This relief is similar to amended…

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March 8, 2021

SEC Releases FAQs on New Rules Establishing Updated Regulatory Framework for Fund Valuation Practices

The staff of the SEC’s Division of Investment Management (Staff) has released responses to frequently asked questions (FAQs) related to the adoption of rules 2a-5 and 31a-4 under the 1940 Act (Rules).   Rule 2a-5 establishes requirements for satisfying a fund board’s obligation to determine fair value in good faith for…

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March 5, 2021

Mutual Fund Sponsor Receives Approval for First Mutual Fund to ETF Conversion

Two mutual funds advised by Guinness-Atkinson, Guinness Atkinson Asia Pacific Dividend Builder Fund and Guinness Atkinson Dividend Builder Fund (Guinness Atkinson Funds), recently received a declaration of effectiveness from the SEC on a Form N-14 registration statement to convert into SmartETFs Asia Pacific Dividend Builder ETF and SmartETFs Dividend Builder…

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March 4, 2021

SEC Issues Statement on Insurance Product Fund Substitution Applications

In a recent statement, the SEC set forth its position that the substitution by an insurance company of registered open-end investment companies used as investment options for variable life insurance policies or variable annuity contracts will not provide a basis for enforcement action under Sections 26(c) and 17(b) of the…

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March 4, 2021

SEC Releases Primer on Money Market Funds and The Repo Market

The SEC’s Division of Investment Management’s Analytics Office recently published a primer (Primer) that discusses the use of repurchase agreements (repos) by money market funds (MMFs). Generally, in a repo one firm sells a security to another firm with a simultaneous promise to repurchase the security at a later date…

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