SEC Relief Update

March 24th | 2020

The SEC has announced some temporary exemptive relief for registered funds, subject to certain conditions, 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; and

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

Like other exemptive relief the SEC has granted, there are conditions that must be satisfied to rely on it. The conditions generally require a determination that reliance on an exemptive order is in the best interest of the registered investment company, notice via email to [email protected], posting the fact that the investment company is relying on an exemptive order to its website, and updating any other disclosure documents as needed. This relief is set to expire on June 30, 2020.

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