Shakespeare wrote: "What's in a name? That which we call a rose by any other name would smell as sweet." Apparently, the US Securities and Exchange Commission ("SEC") isn't so sure. On March 2, 2020, the SEC published a request for comment on Rule 35d-1 under the Investment Company Act of 1940 (the "Rule"). As a general matter, the Rule requires a fund to invest at least 80% of its assets in the manner suggested by its name. However, the SEC and the industry have identified certain challenges in applying the Rule. This Legal Update summarizes the factors that have contributed to these challenges, as described by the SEC, and its requests for comment.
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