On November 2nd, the SEC approved amendments intended to harmonize, enhance, and streamline the layered and complicated exempt offering framework. These rule amendments were first proposed in March 2020. Shaped by public feedback and recommendations received from the SEC’s advisory committees, the SEC’s Government-Business Forum on Small Business Capital Formation, and through direct outreach and engagement with investors and issuers, the modifications are intended to reduce potential friction points to streamline the capital-raising process and meet ever-changing market needs.
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On October 29th, the SEC released the agenda for the November 5, 2020 special meeting of the Asset Management Advisory Committee (AMAC). This committee was formed to provide the SEC with diverse viewpoints on asset management and related advice and recommendations. The event will be webcast live on the SEC’s website beginning at 9:00 a.m. ET and is freely open to the public. The presentation will also be archived on the website for later viewing. Continue reading "SEC Announces Agenda for November 5th Virtual..." »

On October 28th, the SEC adopted a new rule and rule revisions to the regulatory framework for derivatives usage under the Investment Company Act. The enhancements will provide an updated and thorough approach to the regulation of registered investment funds’ derivatives usage that reflects developments over the past decades and focuses on investor protection matters. The Investment Company Act generally limits registered funds and business development companies from engaging in transactions that involve potential future payment obligations. This may include obligations under derivatives such as forwards, futures, swaps and written options. The new rule allows funds to enter into these transactions if they comply with conditions designed to protect investors, such as adopting a derivatives risk management program and complying with a limit on the amount of leverage-related risk that the fund may obtain based on value-at-risk (VaR). Continue reading "SEC Revises Regulations for Derivatives Usage..." »

On October 7th, the SEC announced that it has rescheduled its compliance outreach program’s national seminar for investment companies and investment advisers. It will now take place on November 19, 2020. The compliance program is aimed at helping chief compliance officers (CCOs) and other senior personnel at investment companies and investment advisory firms improve their compliance programs for the protection of investors. Continue reading "SEC to Host Virtual National Compliance..." »

On August 26th, the SEC announced that it will be carefully monitoring the effects of Hurricane Laura on investors and capital markets. As the SEC tracks the storm’s developments, it will consider easing regulatory requirements and extending filing deadlines for those affected by the storm.
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The SEC voted on July 22nd to adopt amendments to rules governing proxy solicitations. These rules are designed to ensure that clients of proxy voting advice businesses have reasonable access to more transparent, accurate, and complete information. Timely access to such information is vital in making sound voting decisions. These amendments aim to facilitate the ability of those who use proxy voting advice (investors and others who vote on investors’ behalf) to make such informed voting decisions without creating situations where undue costs or delays adversely impact the timely provision of proxy voting advice.
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On July 10th, the SEC announced it is considering amendments to Form 13F that would update the reporting threshold for institutional investment managers and make other targeted changes. Form 13F was adopted pursuant to a 1975 statutory directive designed to provide the SEC with data from larger managers about their investment activities and holdings. This information permits the SEC to take these larger managers’ influence and impact into account in maintaining fair and orderly securities markets. Since that time, the reporting threshold has not been adjusted. Section 13(f) of the Securities Exchange Act gives the SEC broad rulemaking authority to determine the size of the institutions required to file reports and the authority to raise or lower this threshold. Increasing the threshold would allow the SEC to continue to monitor the holdings of larger investment managers while reducing compliance and other burdens on smaller managers.
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The staff of the SEC’s Division of Corporation Finance, the Division of Investment Management, and the Division of Trading and Markets has issued a statement regarding Rule 302(b) of Regulation S-T. This statement pertains to concerns stemming from the ongoing COVID-19 pandemic. The SEC has received inquiries from persons and entities subject to Regulation S-T concerning these authentication document retention mandates under Rule 302(b). These requirements can prove to be difficult to meet in light of health, transportation, and other logistical issues raised by the spread of coronavirus disease. This staff statement is temporary and remains in effect until the staff provides public notice that it no longer applies. Such notice will be published at least two weeks before the announced termination date.
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The SEC announced on June 19th that the conditional relief from the in-person voting requirements for fund boards will be extended. This relief was originally provided by the SEC in March 2020 and will now extend at least through December 31, 2020. The extension is designed to provide flexibility to boards of registered funds and business development companies, which may continue to face challenges meeting in person given the ongoing COVID-19 pandemic.
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On April 24th, the SEC announced it is forming an internal, cross-divisional COVID-19 Market Monitoring Group. This temporary, senior-level group will assist the SEC and its various divisions and offices in SEC and staff actions and analysis related to the effects of COVID-19 on markets, issuers, and investors, including main street investors. It will also guide responding to requests for information, analysis and assistance from fellow regulators and other public sector partners.
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The SEC has announced that the Division of Investment Management is extending the EDGAR filing window on April 29, 2020 from 5:30 pm to 10:00 pm EDT. This extension applies to registered investment companies and business development companies. The extension is intended to help ameliorate the potential filing delays due to the ongoing impacts of the COVID-19 pandemic. Continue reading "EDGAR Filing Window Extension on April 29, 2020..." »

The SEC announced on April 8th that it is providing temporary, conditional exemptive relief for business development companies (BDCs) to enable them to make additional investments in small and medium-sized businesses, particularly those with operations affected by COVID-19. BDCs were created to provide capital to smaller domestic operating companies that may not be able to readily access the capital markets through other means.
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The SEC announced on March 25th that it is extending the filing periods covered by its previously enacted conditional reporting relief for certain public company filing obligations under the federal securities laws. It is also extending regulatory relief that was previously provided to funds and investment advisers whose operations may be affected by COVID-19. In addition, the SEC’s Division of Corporation Finance has now issued its views regarding disclosure obligations and other securities law matters as the impact of COVID-19 increases. Continue reading "SEC Extends Conditional Exemptions From..." »

On March 13th, the SEC announced regulatory relief for funds and investment advisers whose operations may be affected by the coronavirus. This relief information covers in-person board meetings and certain filing and delivery requirements for particular investment funds and investment advisers. The effects of the coronavirus may delay or prevent funds and advisers who operate in affected areas from complying with some regulatory obligations due to restrictions on large gatherings, travel and access to facilities, the potential limited availability of personnel. The SEC’s relief is intended to allow funds and advisers to meet those obligations and to continue their operations, given that there may be temporary disruptions outside of their control.
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On October 18th, the SEC voted to propose amendments to establish an expedited review procedure for applications under the Investment Company Act of 1940. These particular applications must be substantially identical to recent precedent. This is in addition to proposing a new informal procedure for applications that would not qualify for this expedited process. The changes are intended to make the application process more efficient as well as to provide additional certainty and transparency to the process. The SEC also intends that the staff of the Division of Investment Management will also begin publicly disseminating comments on applications and responses to those comments.

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