The new relief order is the latest in a series of steps the SEC has taken to assist financial market participants in addressing the impacts of the coronavirus. The SEC’s website provides additional information regarding this response as well as other previous orders. SEC staff continue to assess effects relating to COVID-19 on investors and market participants. As the situation continues to develop, they will consider additional relief from other regulatory requirements where necessary or appropriate.

In regards to this order, it has been issued by the SEC as necessary and appropriate in the public interest and consistent with the protection of investors. Subject to certain conditions, the order provides the following temporary exemptive relief from the Investment Company Act of 1940:

• Relief permitting registered open-end funds and insurance company separate accounts to borrow money from certain affiliates


• Relief that permits additional flexibility under existing interfund lending arrangements and extends the ability to use interfund lending arrangements to funds that do not currently have exemptive relief


• Relief that allows registered open-end funds to enter into lending arrangements or borrowings that deviate from fundamental policies, subject to prior board approval

The temporary relief will last until the date specified in the public notice, which states that it will terminate at least two weeks from the date of the notice and no earlier than June 30, 2020. The SEC encourages entities with general questions or concerns related to impacts of the coronavirus on the operations or compliance of funds and advisers to email IM-EmergencyRelief@sec.gov.

Sources:

SEC Provides Temporary Additional Flexibility to Registered Investment Companies Affected by Coronavirus (www.sec.gov)

Order Under Sections 6(c), 12(d)(1)(J), 17(b), 17(d) and 38(a) of the Investment Company Act of 1940 and Rule 17d-1 Thereunder Granting Exemptions from Specified Provisions of the Investment Company Act and Certain Rules Thereunder (www.sec.gov)