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 20, 2020

Compliance and Effective Dates Set for Final Rule and Related Amendments for Fund-of-Funds Arrangements

On November 19, 2020, the release reflecting the SEC’s adoption of Rule 12d1-4 (FoF Rule) under the 1940 Act and related amendments designed to implement a regulatory framework for investments by registered investment companies and business development companies (BDCs) (collectively, funds) in underlying funds was published in the Federal Register,…

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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 22, 2020

SEC Adopts Final Rule and Related Amendments for Fund-of-Funds Arrangements

The SEC recently adopted a new rule, Rule 12d1-4 (FoF Rule), and related amendments designed to implement a regulatory framework for investments by registered investment companies and business development companies (BDCs) (collectively, funds) in underlying funds. The release adopting the amendments (Adopting Release) also rescinds Rule 12d1-2 (which applies to…

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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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September 23, 2020

NYSE Arca, Inc. Files Proposed Rule Change to Adopt a Generic Listing Rule for Certain Semi-Transparent ETFs

On September 15, 2020, the SEC issued a notice (Notice) regarding the NYSE Arca, Inc.’s (Exchange) filing of a proposed generic listing rule for certain semi-transparent ETFs (ST ETFs). An ST ETF is an exchange-traded fund that discloses alternative forms of information about its underlying portfolio each day, such as…

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August 7, 2020

SEC Proposes Modernizations to Fund Shareholder Reports and Disclosures

On August 5, 2020, the SEC proposed rule and form amendments to modernize the disclosure framework for open-end funds (including mutual funds and ETFs) with respect to shareholder reports and ongoing prospectus updates (Amendments).  The Amendments would streamline shareholder reports for open-end funds to require these reports to highlight and…

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