The Securities and Exchange Commission (SEC) adopted new rule 12d1-4 under the Investment Company Act of 1940, as amended (1940 Act), designed to streamline the regulatory framework applicable to funds that invest in other funds (funds of funds). The new rule significantly reorders the current web of regulation applicable to fund of funds arrangements by subjecting most funds of funds to Rule 12d1-4. Accordingly, the SEC will rescind Rule 12d1-2 under the 1940 Act and certain of the currently effective individual exemptive orders for fund of funds arrangements.
Rule 12d1-4 will be effective 60 days after publication in the Federal Register. The rescission of Rule 12d1-2 and the existing exemptive orders will be effective one year after the effective date of Rule 12d1-4.
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