• SEC Adopts Liquidity Risk Management Rules for Mutual Funds and Other Open-End Investment Companies
  • November 14, 2016 | Authors: Frederick R. Bellamy; Cynthia R. Beyea; Thomas E. Bisset; Steven B. Boehm; James M. Cain
  • Law Firm: Sutherland Asbill & Brennan LLP - Washington Office
  • On October 13, 2016, the SEC approved new Rule 22e-4 under the Investment Company Act of 1940, as amended (the 1940 Act), which will require certain open-end investment companies other than money market funds, to adopt and implement written liquidity risk management programs.1 In addition, new Rule 30b1-10 will require those funds to confidentially notify the Securities and Exchange Commission (the SEC) when their investment portfolios breach particular liquidity thresholds. Compliance with Rules 22e-4 and 30b1-10 will require significant involvement of management and compliance personnel, as well as mandatory board oversight and dedication of resources, before and following the rules’ compliance date.