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Category Archives: Open-Ended Mutual Funds

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What are Knowledgeable Employees?

Posted in Hedge and Private Equity Funds, Investment Adviser Regulation, Open-Ended Mutual Funds

The SEC’s Division of Investment Management issued updated guidance regarding the definition of “knowledgeable employees” under Rule 3c-5 of the Investment Company Act of 1940.  See Managed Funds Ass’n, SEC No-Action Letter, avail. 2/6/14, https://www.managedfunds.org/wp-content/uploads/2014/02/Staff-Response-to-MFA-3c-5-Letter-Final-Outgoing-2-6-14-no-sigs.pdf The SEC staff explained that “private funds” include private equity funds, hedge funds, and other pooled investment vehicles, excluded from… Continue Reading

BDs Remember to File Marketing Material

Posted in Broker-Dealer Regulation, Closed-End Mutual Funds, FINRA Compliance, Investment Adviser Regulation, Investment Company Regulation, Open-Ended Mutual Funds

FINRA has published guidance on its new marketing Rule 2210.  See http://www.finra.org/Industry/Issues/Advertising/P197604   FINRA has indicated that retail communications that will now be subject to this filing requirement has to be filed by February 19, 2013.  FINRA suggested that retail communications relating closed-end funds and structured products must be filed.  FINRA wants, among other things, filed certain presentation… Continue Reading

What’s in a Name? Speculation, Hedging, They Are Not the Same Thing

Posted in Closed-End Mutual Funds, Hedge and Private Equity Funds, Investment Adviser Regulation, Open-Ended Mutual Funds, SEC Enforcement

Recently, in a settled SEC enforcement action, a mutual fund manager allegedly used an option strategy, but the SEC believed it was more speculative than hedging.  See http://www.sec.gov/litigation/admin/2012/33-9377.pdf. The SEC focused on the fact that the prospectus only permitted options for hedging, instead, the SEC claimed option trading was used to speculate.  The SEC cited… Continue Reading