(Article from Registered Funds Regulatory Update, July 2025)
For more information, please visit the Registered Funds Resource Center.
On April 11, 2025, the ICI sent a letter to then newly-confirmed SEC Chair Paul Atkins detailing policy recommendations and priorities that the ICI believes would both advance the SEC’s mission and have the “greatest positive impact for investors.”
Previously in January 2025, the ICI had requested an extension for the compliance dates related to the September 2023 amendments to Rule 35d-1 under the 1940 Act, the so-called “Names Rule,” and further guidance on compliance with the amendments. In response, the SEC published FAQs to provide additional information to industry members and delayed the compliance dates by six months.
Then in April, after receiving continued member feedback on the challenges in implementing the Names Rule amendments, the ICI requested that the SEC “reconsider and repeal some or all of the Names Rule amendments to avoid imposing . . . unnecessary costs and ongoing compliance burdens on funds, and ultimately, investors” with the belief that Chair Atkins would be more receptive to doing so than his predecessor.
The ICI also requested that the SEC: (i) restore the ability of funds to cross-trade fixed income securities by amending Rule 17a-7 under the 1940 Act; (ii) reform the fund proxy system, including to amend certain fund board requirements; (iii) update the requirements for in-person voting by fund directors by granting permanent relief to allow fund boards discretion to hold meetings and vote either in person or remotely through videoconference; (iv) make electronic delivery of information the default delivery option for funds; (v) approve dual share class applications to enable funds to offer both mutual fund and ETF share classes; (vi) allow closed-end funds more flexibility to invest in private funds by removing the 15 percent cap on net assets invested in privately offered funds and reviewing Rule 12d1-4 under the 1940 Act and exempting certain fund structures, such as CLOs, from the 10 percent limit under the rule; (vii) update the framework for co-investments; and (viii) exempt listed closed-end funds from annual shareholder meeting requirements imposed by stock exchange rules and not the 1940 Act or other federal securities laws or state laws applicable to such funds.
ICI Letter, Recommendations for Innovation and Investor Protection (Apr. 11, 2025), available at: https://www.ici.org/system/files/2025-04/25-cl-chair-atkins-investor-priorities.pdf.