Ropes & Gray Releases Investment Management Update

In July, Ropes & Gray released a comprehensive investment management update which covers a variety of industry updates, regulatory announcements, and Securities and Exchange Commission (SEC) rule proposals. The alert highlights the recent Supreme Court decision in FS Credit Opportunities Corp. v. Saba Capital Master Fund, Ltd., in which the Court held that Section 47(b) of the 1940 Act does not empower private parties to sue for rescission of contracts that allegedly violate the 1940 Act. The Ropes analysis notes that the ruling “has substantial implications for funds, including registered closed-end funds and BDCs, as it will strengthen anti-takeover defenses, reduce litigation exposure across operations, and provide greater regulatory certainty.”

The Ropes investment management update also highlights several priorities from the semi-annual “Unified Agenda of Federal Regulatory and Deregulatory Actions” which includes SEC priorities such as: the exemption from Section 17(a), allowing certain purchase or sale transactions between an investment company and certain affiliated persons; amendments to existing rules and/or propose new rules under the Advisers Act and the 1940 Act to improve and modernize the regulations around the custody of advisory client and fund assets; and amendments to existing rules and/or propose new rules under the Advisers Act and the 1940 Act to better facilitate retail investor exposure to private markets through registered investment companies; among other Commission priorities.

The update also provides a breakdown for an SEC request for comment on novel ETF products, expanded offering reforms for closed-end funds and BDCs, and a joint request for comment from the SEC and CFTC on the definition of “swap” and “security-based swap”. The update also provides a breakdown of Federated Hermes challenge to the SEC’s mandatory liquidity fee for institutional prime and institutional municipal money market funds.

Click here to read the Ropes & Gray Investment Management Update.