On March 14, 2025, the Securities and Exchange Commission (SEC) issued the following press release (Release) to extend compliance with the amendments (Amendments) to Rule 35d-1 (Names Rule) under the Investment Company Act of 1940, as amended. The Amendments (as described in our prior client advisory, SEC Adopts Amendments to 'Names Rule' Impacting Regulated Investment Funds) require funds to refrain from naming conventions that are likely to mislead investors, with a focus on ensuring that funds with names that suggest a particular investment focus adopt an investment policy that evidences at least 80 percent of the value of the fund's assets will be invested in the industry, type of investment, or geographic region suggested by the fund's name. The SEC originally bifurcated compliance dates with the Amendments between larger and smaller funds, with larger funds being required to comply by December 11, 2025, and smaller funds being required to comply by June 11, 2026. However, with this most recent Release, the SEC has extended both fund groups dates of compliance by six months, with larger funds now being required to comply with the Amendments by June 11, 2026, and smaller funds being required to comply with the Amendments by December 11, 2026.
In light of this recent extension, newly established and existing funds should be aware of the following:
- Compliance with the Amendments for a newly established fund will be required upon the filing of its first registration statement on or following the new compliance dates (i.e., June 11, 2026 for larger funds and December 11, 2026 for smaller funds).
- In an effort to minimize costs of compliance, existing funds' compliance dates will align with the timing of certain annual disclosure documents depending on the specific type of fund.
- Existing Open-End Funds: Compliance with the Amendments will be required on the date of filing of the first on-cycle annual prospectus update on or following the new compliance dates depending on the size of the fund.
- Existing Closed-End Funds: Compliance with the Amendments will be required on the date of distribution of the first on-cycle annual report to shareholders on or following the new compliance dates depending on the size of the fund.
- Existing Business Development Companies: Compliance with the Amendments will be required upon the filing of the first on-cycle Form 10-K annual report on or following the new compliance dates depending on the size of the company.
Overall Impressions
This Release follows in the wake of several key SEC departures, including Chair Gary Gensler and Commissioner Jaime Lizárraga, and coincides with other recent SEC deferrals, including delayed short-sale reporting rules and paused legal proceedings on Form N-PORT amendments, signaling the extension of prior rule compliance dates with the advent of a new administration.
The SEC's entire press release is available here.
Washington, DC
