SEC Staff Provides No-Action Relief to Mutual Funds and Transfer Agents That Temporarily Delay Disbursement of Redemption Proceeds Based on Reasonable Belief of Financial Exploitation of Seniors and Other Vulnerable Adults

June 22, 2018

On June 1, 2018, the SEC staff granted the ICI’s request for assurance that it would not recommend enforcement action under Section 22(e) of the Investment Company Act of 1940 against mutual funds or their SEC-registered transfer agents if they delay for more than seven days the disbursement of redemption proceeds under circumstances leading to the reasonable belief that financial exploitation of seniors and other vulnerable adults has occurred, is occurring, has been attempted, or will be attempted.

The grant of this relief allows funds and their transfer agents to protect seniors and other vulnerable adult investors in a manner consistent with that permitted for broker-dealers under recently adopted FINRA Rule 2165.


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Compliance, Investment Advisers, Investment Companies, Mutual Funds, Regulatory