The Dodd-Frank Wall Street Reform and Consumer Protection Act: Potential Impact on Registered Investment Companies

The Dodd-Frank Wall Street Reform and Consumer Protection Act (Act) is an historic and wide-ranging piece of legislation that will result in significant changes to the regulatory framework, operations and supervision of the financial services industry. While primarily focused on financial institutions such as banks, major players in the derivatives marketplace, or those involved in subprime lending and securitization, there are a number of statutory provisions, rulemaking directives and required studies that could directly and indirectly impact registered investment companies (funds). These fall into five categories:(I) provisions directly impacting the regulatory framework governing funds; (II) provisions indirectly impacting funds as institutional investors; (III) enhancementsto the enforcement authority of the Securities and Exchange Commission (SEC) and other organizational changes; (IV) risk regulation of “systemically important” financial institutions; and (V) mandated studies thatmay have additional effects on funds.

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