On September 20, 2023, in a 4-to-1 vote, the US Securities and Exchange Commission adopted amendments to Rule 35d-1 under the Investment Company Act of 1940. According to the SEC, the amendments are designed to increase investor protection by, among other things, improving and clarifying the requirement for certain funds to adopt a policy to invest at least 80% of their assets in accordance with the investment focus that the fund’s name suggests. We believe these amendments are likely to result in increased compliance costs and oversight, and as a result, fund companies should begin to review their existing fund line-up to determine the impact that the Amended Rule 35d-1 will have on their funds.

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