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Communications from the Institute do not constitute, and should not be considered a substitute for, legal advice.
[19522]
December 22, 2005
TO: CLOSED-END INVESTMENT COMPANY COMMITTEE No. 42-05
INVESTMENT ADVISERS COMMITTEE No. 16-05
SEC RULES COMMITTEE No. 68-05
SMALL FUNDS COMMITTEE No. 38-05
UNIT INVESTMENT TRUST COMMITTEE No. 18-05
RE: SEC SEMI-ANNUAL REGULATORY AGENDA
The Securities and Exchange Commission has published its semi-annual agenda of
rulemaking actions.1 Set forth below is a summary of changes to the Division of Investment
Management’s agenda related to investment companies and investment advisers, which have
occurred since the last semi-annual agenda was published, and which may be of interest to
Institute members.
A. The following items have been added to “Proposed Rule Stage”:
1. Books and Records to be Maintained by Investment Advisers (updating the
books and records requirements for investment advisers) (p. 65687).
2. Political Contributions by Certain Investment Advisers (proposing new Rule
206(4)-5 under the Investment Advisers Act of 1940 to prohibit an investment
adviser from providing advisory services for compensation to a Government
client for 2 years after the adviser or any of its partners, executive officers, or
solicitors makes a contribution to certain elected officials or candidates) (p.
65687).
3. Disclosure and Recordkeeping Requirements for Investment Advisers Regarding
Brokerage Allocation and Soft Dollar Practices (proposing rules that would
require investment advisers to create a report and maintain records regarding
their direction of brokerage transactions and receipt of research and other
services in connection with those transactions) (p. 65688).
1 SEC Release Nos. IC-27055 and IA-2424 (Oct. 28, 2005); 70 Fed. Reg. 65680 (Oct. 31, 2005), available at
http://a257.g.akamaitech.net/7/257/2422/31oct20050800/edocket.access.gpo.gov/ua051031/pdf/ua051060.pdf.
Division of Investment Management items are listed on Federal Register pages 65681-82 and summarized on pages
65687-93.
2
4. Amendments to Investment Company Registration Statements to Protect Certain
Private Information (proposing modifications to the disclosure requirements in
Forms N-1A, N-2, N-3, AND N-CSR to safeguard the privacy interests of
investors qualifying as principal holders of any class of certain investment
companies with regard to identifying information and of portfolio managers
with regard to quantitative information about certain personal accounts) (p.
65688).
5. Definition of “Issued Ratably” Under Section 18(d) of the Investment Company
Act of 1940 (proposing new Rule 18d-1 under the Investment Company Act that
would define the term “issued ratably” under Section 18(d) of the Act to clarify
that a fund does not issue ratably to its shareholders rights to acquire additional
shares when, by their terms, the rights do not entitle each owner to exercise the
rights and obtain the additional shares) (p. 65689).
6. Investment Company Disclosure Reform (proposing comprehensive reforms of
the mutual fund disclosure requirements on Form N-1A, including streamlining
the delivery of fund information through increased use of the Internet and other
electronic means of delivery) (p. 65689).
7. Amendments to the Cash Solicitation Rule (proposing revisions to the cash
solicitation rule, Rule 206(4)-3 under the Investment Advisers Act) (p. 65689).
B. The following item has been reclassified from “Proposed Rule Stage” to “Final Rule
Stage”:
Definition of Eligible Portfolio Company Under the Investment Company Act of
1940 (adopting rules to modernize the definition of “eligible portfolio company”
by creating a new standard for delineating those companies that do not have
ready access to the public capital markets) (p. 65691).
C. The following item has been reclassified from “Final Rule Stage” to “Completed
Actions”:
Rulemaking for the EDGAR System (adopting amendments to existing rules and
forms to make technical and clarifying corrections and to expand the categories
of mandatory electronic filings and to identify series and classes for certain
investment company filings) (p. 65692).
The Commission also withdrew several actions from the agenda relating to
public holding company matters due to the repeal of the Public Holding Company
Act, effective February 8, 2006.
3
In addition to the above, the following item relating to investment companies
and investment advisers has been added to “Proposed Rule Stage” by the Division of
Corporation Finance:
Electronic Delivery of Proxy Materials (proposing amendments that would relax
existing requirement regarding the electronic delivery of proxy materials) (p.
65684).
Barry E. Simmons
Associate Counsel