SEC Staff Provides Guidance on Affiliated Person Determinations for Series Investment Companies

The staff of the SEC’s Division of Investment Management issued IM Guidance Update No. 2014-6  in which it advises registered funds organized as series of a “series company” that compliance with the affiliated transactions prohibitions of Section 17(a) of the Investment Company Act of 1940 requires identification of any relevant affiliated persons on a series by series basis.  In particular, the Guidance Update notes that affiliated person status with respect to a series can result from the ownership of 5% or more of the outstanding voting securities of that series.  The Guidance Update further advises that affiliated person status based on ownership of voting securities should also be monitored at the series company level based on the total outstanding voting securities of the series company.

IRS Circular 230 Disclosure: To ensure compliance with requirements imposed by the IRS, we inform you that any U.S. tax advice contained in this informational piece (including any attachments) is not intended or written to be used, and may not be used, for the purpose of (i) avoiding penalties under the Internal Revenue Code or (ii) promoting, marketing or recommending to another party any transaction or matter addressed herein.



Topics:  Affiliates, Investment Companies, Investment Company Act of 1940, SEC

Published In: Finance & Banking Updates, Securities Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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