On October 7, 2020, the Securities and Exchange Commission (SEC) adopted a new fund of funds rule. New Rule 12d1-4 is designed to streamline and enhance the existing regulatory framework under which registered funds of funds have been offered. The new rule’s adoption is a recognition that fund of funds arrangements provide an efficient means of achieving portfolio diversity and asset allocation and, among other things, simplify recordkeeping and investment monitoring. In the words of the SEC, the new rule will “provide investors with the benefits of fund of funds arrangements, and . . . provide funds with investment flexibility to meet their investment objectives efficiently.”

New Rule 12d1-4 will be effective 60 days after publication of the adopting release in the Federal Register.

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