SEC’s Division of Investment Management Issues Statement on Importance of Delivering Timely and Material Information to Investment Company Investors

April 16, 2020

On April 14, 2020, the SEC’s Division of Investment Management (Division) issued a statement to underscore the importance of delivering required information to investment company investors on a timely basis (Statement).  The Statement emphasizes that investment companies are subject to Section 10(a)(3) of the 1933 Act, which requires any prospectus used more than nine months after the effective date of the registration statement to include audited financial statements that are not more than sixteen months old.  This requires any fund with a December 31 fiscal year end to update its prospectus by May 1, 2020 to continue sales.  The SEC recently provided relief that permits a fund, subject to certain conditions and if needed due to COVID-19-related circumstances, to delay sending its annual report to shareholders and delivering its prospectuses to existing shareholders for up to 45 days (Prior Relief).  The Prior Relief, however, does not extend to deliveries of prospectuses in connection with sales to new investors.

The Statement also urges investment companies to consider including updated disclosures about risks connected to COVID-19.

The Statement and Prior Relief are available at the links below.

https://www.sec.gov/investment/delivering-timely-material-information

https://www.sec.gov/rules/other/2020/ic-33824.pdf


Categories

Compliance, COVID-19, Investment Companies