SEC Staff Grants Temporary Relief to Support Open-End Funds

On March 26, 2020, the SEC staff (Staff) issued a no-action letter to the Investment Company Institute (ICI Letter) that provides temporary relief to registered open-end investment companies, other than exchange-traded funds and money market funds (open-end funds), and affiliated persons of such open-end funds (and affiliated persons of such affiliated persons) (Affiliates) from certain restrictions in Section 17(a) of the 1940 Act. Subject to conditions that are specified in the ICI Letter, the Staff will permit Affiliates to rely on Rule 17a-9 to purchase an affiliated open-end fund’s debt securities to enhance such fund’s liquidity or to fund shareholder redemptions in light of the short-term dislocation in the fixed income markets caused by the outbreak of COVID-19.

The ICI Letter is available at: Click Here 

This Seward & Kissel memorandum discusses the ICI Letter in greater detail: Click Here

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