November 18, 2020

SEC Adopts Modernized Regulatory Framework for Derivatives Use by Registered Investment Companies and Business Development Companies

The SEC recently adopted Rule 18f-4 (Rule), and rule and form amendments under the Investment Company Act of 1940, as amended (1940 Act), designed to provide a modernized and comprehensive approach to the regulation of the use of derivatives and other financial instruments by registered investment companies and business development…

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October 9, 2020

SEC Reaches Settlement with Investment Adviser Regarding Recapture of Waived Fees and Reimbursed Expenses from Money Market Funds

The SEC reached a settlement with a registered investment adviser (Adviser) for making material misrepresentations regarding the expenses paid by four money market funds (Funds) that the Adviser managed, in connection with fund reimbursement of fees and expenses that the Adviser had waived or reimbursed during the period from January…

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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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May 4, 2020

Major Exchanges for ETFs Receive Approval for Generic Listing Standards for ETFs that Can Rely on Rule 6c-11

Cboe BZX Exchange, Inc. (Cboe), The Nasdaq Stock Market LLC (NASDAQ) and NYSE Arca, Inc. (NYSE) received approval from the SEC’s Division of Trading and Markets (Division) to adopt rules that establish generic listing standards to permit the listing and trading of ETFs that can rely on Rule 6c-11 under…

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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 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 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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