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June 22, 2020 TO: ICI MembersInvestment Company Directors SUBJECTS: COVID-19
Fund Governance RE: SEC Extends Temporary Relief from In-Person Fund Board Meeting Requirement
We are pleased to report that the SEC has issued an exemptive order extending the temporary relief from the in-person fund board meeting requirement for approvals of investment advisory contracts and other items under the Investment Company Act of 1940 to at least December 31, 2020 (“June 19 Order”). The relief extends until the date to be specified in a public notice from SEC staff stating that the relief will terminate, which date will be at least two weeks from the date of the notice and no earlier than December 31, 2020.[1] IDC and ICI had requested an extension and commend the SEC for taking this action.
The June 19 Order supersedes a March 25 exemptive order (“March 25 Order”) with respect to the in-person board meeting relief only, which was set to expire on August 15, 2020.[2] The Commission initially provided the in-person board meeting relief as part of broader exemptive orders providing temporary relief from several requirements of the Investment Company Act and Investment Advisers Act.[3] Based on staff outreach to fund and adviser representatives, the Commission stated that it has determined not to extend the other relief provided in those orders at this time. Relief provided in other sections of the March 25 Order, including the accompanying Commission statement regarding prospectus delivery, will expire as provided in that order.
The Commission stated that it intends to continue to monitor the current situation. The time period for the in-person board meeting relief may, if necessary, be extended with any additional conditions that are deemed appropriate, and the Commission may issue other relief as necessary or appropriate.
Annette Capretta
Deputy Managing Director
Independent Directors Council
endnotes
[1] See Investment Company Act Release No. 33897 (June 19, 2020), available at https://www.sec.gov/rules/exorders/2020/ic-33897.pdf. The press release announcing the relief is available at https://www.sec.gov/news/press-release/2020-139.
[2] See Investment Company Act Release No. 33824 (Mar. 25, 2020), available at https://www.sec.gov/rules/other/2020/ic-33824.pdf. The March 25 Order superseded a similar order dated March 13, 2020. See Investment Company Act Release No. 33817 (Mar. 13, 2020), available at https://www.sec.gov/rules/other/2020/ic-33817.pdf.
[3] See SEC Press Release summarizing actions, available at https://www.sec.gov/news/press-release/2020-73.