Amendments to Procedures With Respect to Applications Under the Investment Company Act of 1940

July 23, 2020

A Small Entity Compliance Guide[1]

Introduction

On July 6, 2020, the Securities and Exchange Commission (the “Commission”) adopted rule amendments to establish an expedited review procedure for exemptive and other applications under the Investment Company Act that are substantially identical to recent precedent, as well as a new informal internal procedure for applications that would not qualify for the new expedited process. These actions are intended to make the application process more efficient as well as to provide additional certainty and transparency regarding the process.

Who is affected by the amendments and new informal procedure?

The amendments and new informal procedure affect all applicants that file an application with the Commission for relief under the Investment Company Act.

Highlights

Expedited Review Procedure for Routine Applications

  • The amendments to rule 0-5 under the Investment Company Act establish an expedited review procedure for routine applications that are substantially identical to recent precedent.
    • Expedited review will be available if the application is substantially identical to two other applications for which an order granting the relief has been issued within three years of the date of the application’s initial filing.
    • Notice for an application filed under expedited review will be issued no later than 45 days from the date of filing unless the application is not eligible under the rules or additional time is necessary for appropriate staff consideration.
    • An application for expedited review will be deemed withdrawn if the applicant does not respond to comments from SEC staff within 30 days.

Procedure for Other Applications

  • The amendments to rule 0-5 under the Act will deem an application outside of expedited review withdrawn if the applicant does not respond to comments from SEC staff within 120 days.
  • New rule 17 CFR 202.13 establishes an internal timeframe for staff to take action on applications outside of expedited review within 90 days of the initial filing and each of the first three amendments thereto, and within 60 days of any subsequent amendment.

Effective date

These new procedures will be effective 270 days following their publication in the Federal Register.

Other resources

The adopting release can be found on the Commission’s website at

https://www.sec.gov/rules/final/2020/ic-33921.pdf

The proposing release can be found on the Commission’s website at

https://www.sec.gov/rules/proposed/2019/ic-33658.pdf

Contacting the Commission

The Commission’s Division of Investment Management is happy to assist small entities with questions regarding amendments to procedures with respect to applications. You may submit a question by email to IMOCC@sec.gov. Additionally, you may contact the Division of Investment Management’s Office of Chief Counsel at (202) 551-6825.

[1] This guide was prepared by the staff of the U.S. Securities and Exchange Commission as a “small entity compliance guide” under Section 212 of the Small Business Regulatory Enforcement Fairness Act of 1996, as amended. The guide summarizes and explains rules and amendments adopted by the Commission, but is not a substitute for any rule itself. Only the rule itself can provide complete and definitive information regarding its requirements.

Last Reviewed or Updated: July 23, 2020