James V. Catano
Washington, D.C. +1 202 261 3376
In 2016, the Staff (Staff) of the Division of Investment Management of the US Securities and Exchange Commission (Commission or SEC) continued to provide informal guidance and interpretations regarding issues of relevance to the investment management industry through a guidance update initiative. Although the number of guidance updates issued by the Staff in 2016 was relatively low when compared to the number from several years ago, the Staff articulated its views with respect to a number of high profile issues, including mutual fund distribution and sub-accounting fees, business continuity planning for funds registered under the Investment Company Act of 1940 (1940 Act), and mutual fund fee structures. Overall, these guidance updates clarify and offer insight into the Staff’s view of certain discrete interpretive questions. However, the guidance updates leave certain other related interpretive questions unresolved.
It is important to note that the guidance updates are not rules, regulations, or statements of the Commission, and the Commission itself, has neither approved nor disapproved the statements and policies set forth in the guidance updates. However, the investment management industry should continue to be mindful and consider the potential implications of the Staff’s guidance updates to existing and future policies and procedures, disclosures to investors, filings with the SEC, and other legal and regulatory matters.
This article provides a summary of the guidance updates published by the Staff in 2016 as well as certain practical considerations that industry participants may wish to take into account in connection with their review of the guidance updates.
Read "2016 Year in Review: Division of Investment Management Guidance Updates."