News & Analysis as of

Mutual Funds Shareholders Investment Company Act of 1940

Carlton Fields

Can Shareholders Rescind an Investment Company’s Contracts Based on 1940 Act Violations?

Carlton Fields on

Section 47(b) of the Investment Company Act of 1940 provides that contracts that violate or “whose performance involves, a violation of” the act are not enforceable by “either party.” ...more

Seward & Kissel LLP

SEC Staff Issues FAQs On Tailored Shareholder Reports

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Who may be interested: Registered Investment Companies - Quick Take: The staff of the SEC’s Division of Investment Management (Staff) recently issued responses to frequently asked questions (FAQs) covering the SEC’s...more

Troutman Pepper Locke

SEC Releases New Guidance on Tailored Shareholder Reports

Troutman Pepper Locke on

On January 19, 2024, the Division of Investment Management staff at the Securities and Exchange Commission (SEC), released several responses to frequently asked questions (FAQs) related to the adoption of rules and form...more

Seward & Kissel LLP

SEC Releases Staff Bulletin on Differential Advisory Fee Waivers

Seward & Kissel LLP on

Who may be interested: Investment Advisers, Mutual Fund Boards of Directors - Quick Take: The SEC staff recently issued a bulletin to highlight the requirements of Section 18 of the Investment Company Act of 1940 (1940...more

Carlton Fields

Converting Mutual Funds to ETFs: A Fertile Field?

Carlton Fields on

A trend seems to be starting for open-end management investment companies to reorganize into exchange-traded funds. The March 12, 2021, merger of the Adaptive Growth Opportunities Fund, a series of the Starboard Investment...more

Goodwin

Financial Services Weekly Roundup: SEC Proposes Modified Disclosure Framework For Funds

Goodwin on

In the News. The Securities and Exchange Commission (SEC) proposed modifying the disclosure framework for mutual funds and exchange-traded funds (funds), which would create a new layered disclosure regime that attempts to...more

Bass, Berry & Sims PLC

Chris Lazarini Outlines Factors to Determine Whether Adviser's Fees Violate Investment Company Act

Bass, Berry & Sims PLC on

Bass, Berry & Sims attorney Chris Lazarini outlined the factors courts must consider in determining whether the fees an adviser charges a mutual fund are excessive and in violation of the Investment Company Act. All the...more

K&L Gates LLP

Court Grants Summary Judgment to Defendant Investment Adviser in Section 36(b) Excessive Fee Lawsuit

K&L Gates LLP on

In a strong opinion, a federal court in the Southern District of New York recently dismissed a suit alleging that the defendant charged “excessive” fees to a mutual fund....more

Morgan Lewis

In Eagerly Awaited Ruling, AXA Beats Excessive Fee Claim

Morgan Lewis on

The fund manager was victorious in the first court decision to come from a group of complaints filed over the last several years against manager-of-manager models. Introduction - Following a 25-day bench trial, the...more

K&L Gates LLP

U.S. SEC Proposes Liquidity Risk Management Programs, Optional “Swing Pricing,” and Liquidity Reporting for Mutual Funds and...

K&L Gates LLP on

On September 22, 2015, the Securities and Exchange Commission (“SEC”) proposed a new rule and amendments to rules and reporting forms under the Investment Company Act of 1940 (the “1940 Act”), designed to standardize...more

Morgan Lewis

SEC Proposes Liquidity Risk Management Rules for Open-End Funds

Morgan Lewis on

In the second step of its five-part plan to enhance registered funds regulations, the SEC has proposed new requirements on portfolio liquidity, risk monitoring, and board oversight. At an open meeting held on September...more

Troutman Pepper

The SEC Releases the First Distribution-In-Guise Enforcement Action Concerning Fund Assets Used to Pay For Marketing and...

Troutman Pepper on

The SEC’s order provides significant guidance on how the SEC staff will scrutinize the propriety of payments made pursuant to commonly occurring agreements between mutual funds and their service providers and with respect to...more

K&L Gates LLP

Seventh Circuit Affirms District Court on Remand in Jones v. Harris Associates

K&L Gates LLP on

In Jones v. Harris Associates L.P., the Supreme Court adopted the Gartenberg standard for cases brought under Section 36(b) of the Investment Company Act of 1940: “[T]o face liability... an investment adviser must charge a...more

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