SEC Sets Comment Deadline for Proposal on Investment Company Names

Comments are due by August 16, 2022 for an SEC proposal that would increase fund disclosure and recordkeeping requirements to address investment company names that may mislead investors. The SEC proposal was published in the Federal Register.

As previously covered, the amendments would modify Rule 35d-1 ("Investment company names") of the Investment Company Act, to require among other things:

• funds with suggestive names to invest at the minimum 80 percent of their assets in investments consistent with that name;

• closed-end funds and business development companies with no listed shares to conduct a shareholder vote before changing their 80 percent policy; and

• funds that do not find ESG factors to be an essential part of their investments to refrain from using ESG or similar terminology in their names.