New Rules, Proposed Rules, Guidance and Alerts -

PROPOSED RULES -

SEC Proposes New Fair Valuation Framework for Registered Funds -

Under the Investment Company Act of 1940, securities held by a fund for which market quotations are readily available are to be priced at current market value, and securities for which market quotations are not readily available are to be priced at fair value as determined in good faith by the fund’s board. On April 21, 2020, the SEC proposed new Rule 2a-5 under the 1940 Act, which is intended to provide a framework for fund valuation and to provide clarity on how fund boards can satisfy their statutory obligations in the valuation process. Key elements of the proposal are as follows:

• Assignment of the fair value determination. Under Rule 2a-5, a fund’s board would be permitted to assign the responsibility to make fair value determinations for some or all fund investments to the fund’s investment adviser or to one or more sub-advisers…