In its June 2014 Guidance Update, the SEC’s Division of Investment Management said that series funds are individual investment companies for purposes of compliance with certain investor protections, including the 1940 Act’s restrictions on principal transactions.

Section 17(a) of the 1940 Act generally prohibits an “affiliated person” of a mutual fund, or an affiliated

Should federal regulators impose exit fees on bond funds?  Officials at the Board of Governors of the Federal Reserve may think so.

The Financial Times reported on June 16, 2014 that Fed officials have discussed whether regulators should impose exit fees on bond funds to avert a potential run by investors.  The regulators apparently are

The SEC’s Division of Investment Management recommends that fixed income fund advisers take steps to assess portfolio risk in light of “potential market volatility” and review the adequacy of related prospectus disclosures.

In particular, the staff suggests that fund advisers “consider taking” the following steps:

  • Assess and stress-test liquidity during normal and stressed environments, taking

In two recent no-action letters, the SEC staff expanded the ability of business development companies (BDCs) to invest in registered investment advisers.  Although Section 12(d)(3) of the Investment Company Act of 1940 generally prohibits a registered investment company – including a closed end fund that elects to be treated as a BDC – from acquiring