The SEC proposed a new rule and several amendments that would "streamline and enhance" the regulatory framework for funds of funds, which exist where mutual funds or other funds invest in shares of another fund (i.e., "fund of funds" arrangements).
Under the proposal, a fund would not need an individual exemption order from the SEC when it takes shares from another fund that exceed Investment Company Act limits. To rely on this rule, the funds would have to comply with new investor protection requirements that would restrict funds' ability to, among other things:
Comments on the proposal must be submitted within 90 days of its publication in the Federal Register.
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