Securities and Exchange Commission Enhances Investment Company Act's Names Rule to Better Protect Investors

The SEC has adopted amendments to the Investment Company Act Names Rule to improve investor protection. It requires more funds to adopt an 80 percent investment policy, which states that the fund must invest at least 80 percent of its assets in investments that are consistent with the fund's name. The rule also includes new requirements such as quarterly portfolio reviews, disclosure of terms used in the fund's name, and recordkeeping requirements. These amendments will be effective 60 days after publication and funds with assets of $1 billion or more must comply within 24 months, while those with less have 30 months to comply.