June 2, 2020

CFTC Issues Customer Advisory Regarding Commodity ETPs and Funds

Recently, the CFTC issued a customer advisory (Advisory) in response to increased investor interest in exchange-traded products (ETPs) and funds that invest in futures or other types of commodity interests (collectively, Pools). The Advisory highlights the distinctions between ETPs and funds that invest in securities and Pools, which include the…

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June 2, 2020

SEC Staff Withdraws Prior No-Action Guidance on State Control Share Acquisition Statutes

On May 27, 2020, the SEC staff (Staff) issued a statement (Statement) withdrawing a prior no-action letter (Boulder Total Return Fund, SEC No-Action Letter (Nov. 15, 2010) (Boulder)) addressing certain aspects of the intersection of the voting requirements of Section 18(i) of the 1940 Act and state control share acquisition…

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May 21, 2020

SEC Charges Three Former Audit Firm Partners for Exam Sharing Misconduct

On May 18, 2020, the SEC entered into settlement agreements with three former partners of an independent public accounting firm (Firm) in connection with the partners’ conduct involving improperly receiving and sharing information about internal continuing professional education exams conducted by the Firm. The former partners participated in soliciting or…

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May 15, 2020

ETF Sponsors Submit Letters to Major Exchanges Regarding ETP Categorization

On May 13, 2020, a group of six ETF sponsors submitted letters to Cboe Global Markets, Inc., NASDAQ, and Intercontinental Exchange Inc. (the parent of NYSE Arca) urging that each exchange adopt exchange listing rules or other means to categorize exchange-traded products (ETPs) differently (ETP Letter).  The ETP Letter proposes…

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May 4, 2020

SEC Fines Fund Adviser for Overvaluing its Securities and Misleading Performance Disclosures

On April 28, 2020, the SEC fined a fund’s adviser in a consent order (Order) for the adviser’s conduct involving the fund’s overvaluation of its securities and the adviser’s misleading statements about the fund’s performance in shareholder communications. The fund primarily invested in non-agency mortgage-backed securities (NA MBS) and, during…

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April 24, 2020

SEC Adopts Rule Clarifying Fair Value Determinations

On April 21, 2020, the SEC proposed Rule 2a-5 under the 1940 Act (Rule) that specifies what is required for a fund (or a business development company) to determine the fair value in good faith of the fund’s investments that do not have readily available market quotations for purposes of Section 2(a)(41) of the 1940 Act and Rule 2a-4 under the 1940 Act.

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April 16, 2020

SEC’s Division of Investment Management Issues Information Update on Exemptive Application Hearing Requests

The SEC’s Division of Investment Management (Division) recently issued an Information Update (Update) regarding changes to the SEC’s procedures for granting exemptive applications filed under the 1940 Act or the Advisers Act.  Before issuing an exemptive order, the SEC provides a public notice summarizing the exemptive relief that will be…

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April 9, 2020

SEC Provides Temporary Relief to Business Development Companies Related to COVID-19

On April 8, 2020, the SEC issued a temporary exemptive order that provides specific, technical relief to BDCs with respect to certain senior securities and joint transaction restrictions and prohibitions under the 1940 Act (Order).  The Order permits BDCs to issue senior securities subject to a modified asset coverage calculation…

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March 25, 2020

Federal Reserve Opens Expanded Money Market Fund Liquidity Facility

On March 23, 2020, the Federal Reserve (Fed) announced the opening of an expanded Money Market Mutual Fund Liquidity Facility (MMFLF). The MMFLF will last until September 30, 2020 and applies to money market funds (MMFs) that identify themselves as prime, single state, or other tax exempt MMFs on Form…

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March 19, 2020

Federal Reserve Creates Money Market Fund Liquidity Facility

On March 18, 2020, the Federal Reserve (Fed) announced the creation of a Money Market Mutual Fund Liquidity Facility (MMFLF).  The MMFLF will last until September 30, 2020 and applies to money market funds (MMFs) that identify themselves as “prime” MMFs on Form N-MFP.  Under the MMFLF, eligible borrowers (certain…

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