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Withdrawal of SEC Staff Guidance and Letters Related to Fund Fair Valuation Rule and Adviser Marketing Rule

The SEC staff recently announced the withdrawal or modification of certain staff guidance and no-action letters (“Staff Statements”) in connection with the compliance dates of Rule 2a-5 under the Investment Company of 1940 (Fund Fair Valuation Rule) and Rule 206(4)-1 under the Investment Advisers Act of 1940 (Adviser Marketing Rule).

Fund Fair Valuation Rule

On December 3, 2020, the SEC adopted new Rule 2a-5 under the Investment Company Act of 1940, addressing valuation practices and the role of the board of directors with respect to determining the fair value of the investments of a registered investment company or business development company. See Seward & Kissel’s memorandum, “SEC Adopts Rule to Modernize Fund Valuation Practices,” here. The compliance date for the Fund Fair Valuation Rule was September 8, 2022. In the adopting release for the Fund Fair Valuation Rule, the SEC indicated that certain Staff Statements would be withdrawn or rescinded upon the compliance date of the rule.

Advisor Marketing Rule

On December 22, 2020, the SEC adopted amendments designed to modernize the rules governing investment adviser advertisements and compensation to solicitors under the Investment Advisers Act of 1940. See Seward & Kissel’s memorandum, “SEC Adopts New Investment Adviser Marketing Rule,” here. The Adviser Marketing Rule has a compliance date of November 4, 2022. In the adopting release for the Adviser Marketing Rule, the SEC indicated it would withdraw certain Staff Statements, as those positions are either incorporated into the Adviser Marketing Rule or will no longer apply. In October 2021, the SEC issued Information Update 2020-10 formally withdrawing certain Staff Statements related to the Adviser Marketing Rule. The withdrawal of the Staff Statements will be effective as of Nov. 4, 2022, which is the compliance date for the rule.

Availability of Modified or Withdrawn Staff Statements on SEC Website

The list of Staff Statements withdrawn (or to be modified or withdrawn) for the Fund Fair Valuation Rule and the Adviser Marketing Rule, as well as other Staff Statements related to other topics, is available on the SEC website and can be found here.

Both the list and the referenced Staff Statements represent the views of the staff of the SEC’s Division of Investment Management and are not a rule, regulation or statement of the SEC. Furthermore, the SEC has neither approved nor disapproved the content of the list or the referenced Staff Statements.

The opinions expressed are those of the author(s) and do not necessarily reflect the views of the firm or its clients, or any of its or their respective affiliates. This article is for general information purposes and is not intended to be and should not be taken as legal advice.