Investment Management Issues Guidance Concerning Fund Disclosures Regarding Current Market Conditions

March 2, 2016

In a Guidance Update, Staff of the SEC’s Division of Investment Management set out steps funds should take on an ongoing basis to provide investors with risk disclosures that remain robust in changing market conditions.  Funds should monitor market conditions and their impact on fund risks to determine if changing conditions will affect the fund and its investment risks. After any such determination, funds should assess whether fund risks have been adequately communicated to investors in light of current market conditions.
If a fund determines that risk disclosures are no longer adequate, it should communicate with investors and provide updated information. The Staff also provided two examples of current conditions that have led to updated disclosures in numerous filings the Staff reviewed. The Staff noted that funds exposed to fixed-income securities have recently provided disclosure regarding the potential for, and the attendant consequences of, a rise in interest rates, while funds with significant exposure to Puerto Rican debt have provided disclosure regarding Puerto Rico's financial difficulties.
Click here to access the guidance.


Investment Companies, Mutual Funds