SEC Adopts New Names Rule Under the Investment Company Act (2024)

FAQs

SEC Adopts New Names Rule Under the Investment Company Act? ›

The SEC estimates that the percentage of registered funds subject to the rule will increase from 60% to 76% under the new Names Rule. The Names Rule prohibits registered funds from using “materially deceptive or misleading” names.

Under the current Names Rule, if a registered investment company's name suggests it has a focus in particular investment types, industries, or geographies, or that it has tax-exempt status, the fund must adopt a policy to invest at least 80 percent of the value of its assets consistent with its name.

80 Percent Investment Policy Requirement: The Names Rule's existing 80 percent investment policy requirement requires funds whose names suggest a focus on particular investments, industries, or geographical regions to invest at least 80 percent of their fund assets in the type of investment, industry, or geographic ...

The current names rule generally requires that if a fund's name suggests a focus in a particular type of investment, or in investments in a particular industry or geographic focus, the fund must adopt a policy to invest at least 80% of the value of its assets in the type of investment, or in investments in the industry ...

For purposes of section 35(d) of the Act (15 U.S.C. 80a-34(d)), a materially deceptive and misleading name of a fund includes: (1) Names suggesting guarantee or approval by the United States Government.

The Securities and Exchange Commission (SEC) has finalized new rules to enhance and standardize disclosures regarding cybersecurity risk management, strategy, governance, and incidents by public companies that are subject to the Securities Exchange Act of 1934 reporting requirements.

The Names Rule:

It mandates that any fund that includes a specific type of investment in its name, such as ESG, must allocate at least 80% of the fund's value accordingly.

The Investment Company Act of 1940 is an act of Congress that regulates the formation of investment companies and their activities. The legislation in the Investment Company Act of 1940 is enforced and regulated by the Securities and Exchange Commission (SEC).

Section 12D-1, under the Investment Company Act of 1940, restricts investment companies from investing in one another. The rule was enacted to prevent fund of funds arrangements from one fund acquiring control of another fund to benefit its investors at the expense of the shareholders of the acquired fund.

Section 12(d)(1) of the 1940 Act limits the amount an acquiring fund can invest in an acquired fund to 3% of the outstanding voting stock of the acquired fund, 5% of the value of the acquiring fund's total assets in any one other acquired fund, and 10% of the value of the acquiring fund's total assets in all other ...

What is SEC Rule 35d 1 adopting release? ›

On September 20, 2023, the Securities and Exchange Commission (“SEC”) adopted amendments to Rule 35d-1[1] (the “Names Rule”) under the Investment Company Act of 1940, as amended (“1940 Act”), as well as amendments to certain investment company registration forms, Form N-PORT and certain recordkeeping requirements ( ...

Currently, the Names Rule requires a regulated fund with a name suggesting that the fund focuses on a particular type of investment, a particular industry or a particular geographic area, or whose name suggests a certain tax treatment, to adopt a policy to invest, under normal circ*mstances, at least 80% of its assets ...

Rule 17j-1 under the Investment Company Act addresses these conflicts of interest by: (i) prohibiting fraudulent, deceptive or manipulative acts by fund affiliates and certain other persons in connection with their personal transactions in securities held or to be acquired by the fund; (ii) requiring funds and their ...

FINRA Rule 3110 requires a firm to establish and maintain a system to supervise the activities of its associated persons that is reasonably designed to achieve compliance with the applicable securities laws and regulations and FINRA rules.

Rule 35d-1, initially adopted in 2001, required among other things that certain funds using names suggesting investment in certain types of investments or securities, or in certain countries or geographic regions, to adopt a policy to invest at least 80 percent of its assets in those investments, securities, countries ...

The Commission adopted Rule 613 to create a comprehensive consolidated audit trail that would allow regulators to efficiently and accurately track all activity throughout the U.S. markets in National Market System (NMS) securities.

An adviser holds custody over client accounts. Now what? Unless covered by the Audit Provision Exception, the SEC Custody Rule requires the adviser to do the following: Maintain client assets with a “qualified custodian” such as a bank, broker-dealer, or futures commission merchant.