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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January 25, 2021

SEC Staff Grants No-Action Relief from Section 17(f) of the 1940 Act and Rule 17f-2 Thereunder with Respect to Self-Custody of Loan Interests

On January 13, 2021, the SEC staff (Staff) granted no-action relief pursuant to Section 17(f) of the 1940 Act and Rule 17f-2 thereunder with respect to certain funds (Funds) or their directors or officers if the Funds, each acting as self-custodian of its assets, maintain custody of loan interests pursuant…

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December 18, 2020

Pricing Service to Pay $8 Million to Settle SEC Charges

The SEC recently settled charges against a global securities pricing service and registered investment adviser (Pricing Service), for compliance deficiencies relating to its delivery to clients of prices for certain categories of fixed-income securities based on quotes it received from a single market participant (single broker quotes).  According to the…

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December 18, 2020

SEC’s Investment Management Division Issues Guidance on Funds’ Risk Disclosure Regarding Investments in Emerging Markets

The SEC Division of Investment Management’s Disclosure Review and Accounting Office (Staff) has issued guidance (Guidance) based on current findings from the Staff’s ongoing review of risk disclosures for both actively managed and index funds with significant exposure to emerging markets. The Guidance notes that in many emerging markets there…

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December 17, 2020

SEC Adopts Rule to Modernize Fund Valuation Practices

On December 3, 2020, the SEC adopted new Rule 2a-5 (Rule) under the 1940 Act addressing valuation practices and the role of the board of directors/trustees (board) with respect to determining the fair value of the investments of a registered investment company or business development company (fund). Section 2(a)(41) of…

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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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