Shakespeare wrote: "What's in a name? That which we call a rose by any other name would smell as sweet." Apparently, the US Securities and Exchange Commission ("SEC") isn't so sure. On March 2, 2020, the SEC published a request for comment on Rule 35d-1 under the Investment Company Act of 1940 (the "Rule"). As a general matter, the Rule requires a fund to invest at least 80% of its assets in the manner suggested by its name. However, the SEC and the industry have identified certain challenges in applying the Rule. This Legal Update summarizes the factors that have contributed to these challenges, as described by the SEC, and its requests for comment.
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This Mayer Brown article provides information and comments on legal issues and developments of interest. The foregoing is not a comprehensive treatment of the subject matter covered and is not intended to provide legal advice. Readers should seek specific legal advice before taking any action with respect to the matters discussed herein.
