SEC Provides Short-Term Funding Flexibility for Certain Registered Funds and Insurance Accounts

The SEC provided temporary flexibility for certain registered and insurance company accounts to facilitate "short-term funding" during the COVID-19 pandemic.

According to the SEC Order providing exemptions from certain requirements of the Investment Company Act, the temporary relief allows:

• registered open-end funds and insurance company separate accounts to borrow money from certain affiliates;

• greater flexibility regarding existing interfund lending options and interfund lending arrangements for certain funds that would not otherwise enjoy exemptive relief; and

• registered open-end funds to choose lending arrangements or borrowings that are outside of their "fundamental policies" (with prior board approval).

The SEC noted that a public notice will be provided detailing when the relief will terminate, which will be no earlier than June 30, 2020.