SEC Staff Issues Guidance Regarding Open-End Fund Investments in Closed-End Funds

February 16, 2017

The staff of the U.S. Securities and Exchange Commission’s (SEC) Division of Investment Management (Staff) recently issued guidance regarding open-end fund investments in closed-end funds. The Staff’s interpretive letter (Interpretive Letter), in response to a request letter from our firm (Incoming Letter), agreed with the position that registered open-end investment companies and registered unit investment trusts (collectively, open-end funds) may invest in closed-end funds in reliance on Rule 12d1-2 under the Investment Company Act of 1940 (1940 Act), regardless of whether the investing and underlying funds are in “the same group of investment companies.”

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