New Rules, Proposed Rules, Guidance and Alerts -

SEC STAFF GUIDANCE AND ALERTS –

SEC Staff No-Action Letter Allows Fund Boards to Rely on CCO Representations for Affiliated Transactions –

In a no-action letter to the Independent Directors Council (IDC) dated October 12, 2018, the staff of the SEC’s Division of Investment Management stated it would not recommend enforcement action for violations of Sections 10(f), 17(a) or 17(e) of the Investment Company Act of 1940, if a fund’s board of directors receives, no less frequently than quarterly, a written representation from the fund’s chief compliance officer that transactions effected in reliance on Rules 10f-3, 17a-7 or 17e-1 under the 1940 Act complied with procedures adopted by the board pursuant to the relevant exemptive rule, instead of the board itself determining compliance. In providing no-action assurance, the SEC staff noted the significant growth in the number and scope of director responsibilities resulting from market, regulatory and technological developments. With this backdrop, the SEC staff has undertaken a review of existing director responsibilities to consider whether they are appropriate and exercised in a manner that serves the shareholders’ best interests.