What's In an (Investment Company) Name?

Posted by Lori Ehleben on Jun 30, 2022 12:15:00 PM

The Securities and Exchange Commission has long enforced consistency between the name and strategy of a regulated investment company.

The original “Names Rule,” Rule 35d-1 of the Investment Company Act of 1940, was issued in 2001 and was intended to help ensure a fund’s name does not misrepresent the fund’s investments and risks to investors. It generally requires that if a fund’s name suggests a focus in a particular investment type, industry or geographic region, the fund must adopt a policy to invest at least 80% of its assets accordingly. Similarly, if the fund’s name suggests that its distributions are tax-exempt, for example, the investment policy must adhere to this claim.

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On-Demand Webcast- Significant Changes Ahead: Your Guide to the SEC's Proposed Filing and Disclosure Modernization

Posted by admin on Dec 16, 2020 4:03:58 PM

In BBD's latest Webcast, John Braun and Cory Stewart teamed up with Steve Connors from SEI and David Freese and Sean Graber from Morgan Lewis for a dynamic discussion on the SEC's new proposed filing and disclosure modernization. 

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John Braun Contributes to Fund Board Views With Viewpoints Column on the SEC's Proposed Rule 2a-5: Thoughts From a Fellow Gatekeeper

Posted by admin on Oct 14, 2020 6:35:02 PM

BBD partner John Braun recently offered his gatekeeper perspective on the evolution of fair value and the SEC's proposed Rule 2a-5 in a Viewpoints column for Fund Board Views.

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COVID-19: Notable Investment Company Regulatory Changes

Posted by Rajesh Misra on Apr 17, 2020 5:10:15 PM

In recognition of the operational challenges caused by COVID-19 for funds and their Trustees/Directors, the Securities and Exchange Commission (“SEC”) and the Internal Revenue Service (“IRS”) have both issued exemptions relating to filing due dates and other requirements.

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COVID-19 and Financial Statement Disclosures

Posted by James Kaiser on Mar 25, 2020 10:30:59 AM

The Coronavirus pandemic (“COVID-19”) is causing significant financial and operating hardships across all industries. Any companies that are currently preparing GAAP financial statements, including investment companies, should consider whether or not the impact of COVID-19 represents a significant event as defined in FASB Accounting Standards Codification (“FASB ASC”) 855, Subsequent Events.

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The SEC's Proposed Rule 2-01 Auditor Independence Updates: Do These Modifications Do The Trick?

Posted by John Braun on Feb 12, 2020 6:53:00 PM

On December 30, 2019, the SEC proposed amendments to certain independence requirements with the goal of further aligning the auditor’s independence analysis with Rule 2-01’s “reasonable investor” concept.  The concept asks us to consider whether a reasonable investor with knowledge of all the relevant facts and circumstances would conclude that the auditor is capable of exercising objective and impartial judgment?

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Delays For Three Major FASB Standards A Win For Private Companies and Smaller SEC Filers

Posted by Cory Stewart on Nov 1, 2019 3:54:31 PM

On Wednesday, October 16, 2019, the Financial Accounting Standards Board (“FASB”) unanimously voted to delay effective dates on standards related to accounting for leases, credit losses and hedging.  These delays impact private companies and smaller SEC filers.  The effective dates remain unchanged for larger public entities.

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SEC Updates the Loan Rule

Posted by Lori Ehleben on Jul 12, 2019 4:59:35 PM

In June 2019, the SEC issued amendments to Rule 2-01 of Regulation S-X (“the Loan Rule”). The amendments now more effectively identify whether independence may be impaired with respect to an audit client when the audit firm or its covered members have a lending relationship with certain shareholders of that audit client. 

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Investment Company Acquisitions: SEC Proposes Amendments to Financial Statement Disclosures

Posted by John Braun on May 16, 2019 11:28:07 AM

Currently, there are no specific rules or requirements for investment companies relating to the financial statements of acquired funds. Instead, investment companies apply the general SEC requirements of Rule 3-05 and the pro-forma financial information requirements in Article 11 requiring disclosure and information, which are not always relevant to investment companies.

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SEC Disclosure Update and Simplification Release

Posted by John Braun on Nov 16, 2018 3:15:31 PM

On August 17, 2018, the SEC adopted what effectively amounts to “housekeeping items” for a variety of public issuers. These updates are effective November 5, 2018. 

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