Investment Company Act

The Securities and Exchange Commission on February 12, 2015, entered findings against an investment adviser to several alternative mutual funds for maintaining $247 million in cash collateral at broker-dealer counterparties instead of the fund’s custodial bank.  The SEC staff discovered the alleged violations during a routine examination.  Without agreeing with or denying the charges, the

The SEC has given a preliminary thumbs-down to non-transparent exchange traded funds (ETFs).  In two separate notices issued on October 21, 2014, (found here and here), the Commission stated that applications to allow actively managed ETFs to withhold daily disclosure of portfolio holdings did not “meet the standard for exemptive relief” under Section 6(c)

In a Guidance Update published on June 30, 2014 by the SEC’s Division of Investment Management, the staff closed a loophole that allowed business development companies (BDCs) with wholly owned Small Business Investment Company (SBIC) subsidiaries to avoid meeting asset coverage requirements when the SBIC subsidiaries issue debt that is not guaranteed by the Small

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

The Securities and Exchange Commission sanctioned an investment adviser and its owner for failing to seek best execution and breaching their fiduciary duty in selecting mutual fund share classes for three advisory clients.

This case is one of several arising out of the staff’s investigation into governance and disclosure practices related to a “turnkey” mutual

Can two affiliated ETFs merge in reliance on Rule 17a-8 under the Investment Company Act despite representations they made to obtain exemptive relief from the Commission?  That’s the question addressed in a recent Guidance Update from the Division of Investment Management.

Among the standard representations required by the SEC to grant exemptive relief necessary to