ADMINISTRATIVE MATTERS
SEC to Suspend Filings with XBRL Errors in Filing Fee Exhibits
On February 6, 2026, the US Securities and Exchange Commission (the “SEC” or the “Commission”) announced that the Electronic Data Gathering, Analysis, and Retrieval (“EDGAR”) system will suspend filings that include filing fee exhibits with incorrect or incomplete eXtensible Business Reporting (“XBRL”) information. Previously, the EDGAR system would accept the filing with a warning rather than suspend the filing. This change took effect on March 16, 2026. All fee-bearing forms—notably including registration statements filed on Form N-2—must include fee exhibits with correct information, calculation, and XBRL tagging, or risk delaying the effectiveness of the filing and registration statement. The SEC recommends that filers consult the EDGAR Filer Manual, the XBRL Guide, and the SEC’s Fee Exhibit Preparation Tool prior to filing.
SEC to Suspend Filings with XBRL Errors in Filing Fee Exhibits
SEC Issues Names Rule FAQ
On February 19, 2026, the staff of the SEC’s Division of Investment Management issued the 2025–26 Names Rule FAQs which articulate the staff’s current interpretive views following the SEC’s 2023 amendments to Rule 35d‑1 under the Investment Company Act of 1940, as amended (the “’40 Act”) (the “Names Rule”). The FAQs reconcile legacy 2001 Names Rule FAQs with the expanded scope of the amended rule, clarify when 80% investment policies are required and how they may be implemented, explain when shareholder notice or approval is required, and address modern fund structures and naming conventions.
How the FAQs Update and Refine Interpretation of the Amended Names Rule
1. Expansion Beyond Asset Types to Investment Characteristics
The FAQs confirm that the amended rule applies to fund names suggesting not only asset classes, industries, or geographies, but also names suggesting particular characteristics of investments or issuers, such as “growth,” “value,” or “high‑yield.” This represents a broader trigger for the 80% investment policy requirement than under the original rule.
2. Emphasis on Context and Reasonable Investor Understanding
The FAQs stress that fund names must be evaluated in their full context. Certain terms that ordinarily would require an 80% policy—such as “growth” or “value”—may not do so when paired with modifiers or other terms that clearly convey a different portfolio‑wide objective (for example, “income and growth”). This reflects a principles‑based approach centered on how a reasonable investor would interpret the name.
3. Distinction Between Investment Focus and Investment Technique
The FAQs clarify that names suggesting an investment technique or strategy, rather than the characteristics of portfolio holdings, do not require an 80% investment policy solely on that basis. Examples include terms such as “merger” or “merger arbitrage,” which the staff views as describing a strategy rather than the nature of the investments themselves.
4. Recognition of Modern Fund Structures
For funds investing through private funds or special purpose vehicles with unfunded commitments, the FAQs permit cash and cash equivalents held to meet reasonably expected capital calls to be included in the 80% basket, provided that appropriate disclosure is included. This interpretation modernizes the rule’s application to current portfolio and liquidity management practices.
5. Clarification of Shareholder Approval and Notice Requirements
The FAQs explain that shareholder approval is not required to adopt or revise a fundamental 80% investment policy unless the change constitutes a deviation from an existing fundamental policy. Similarly, funds are not required to provide 60 days’ notice for non‑material changes to non‑fundamental 80% policies that are made solely to comply with the amended rule or that make the policy more stringent.
6. Affirmation of Tax‑Exempt and Municipal Fund Treatment
The staff reaffirms that names using terms such as “municipal” are treated as tax‑exempt funds for purposes of Rule 35d‑1 and must adopt a fundamental 80% policy. Single‑state tax‑exempt funds may include securities of out‑of‑state issuers if the income remains exempt from the named state’s tax and appropriate disclosure is provided.
7. Continued Application of Anti‑Fraud Principles
Even where an 80% investment policy is not required, the FAQs repeatedly emphasize that fund names remain subject to Section 35(d)’s prohibition on materially misleading or deceptive names and to the general anti‑fraud provisions of the federal securities laws.
Bottom Line
Taken together, the 2025–26 FAQs provide a clearer, more practical framework for applying the amended Names Rule. During the lead up to the new fund and large fund family compliance dates beginning in June 2026¹ investment advisers should:
- Review and reassess fund names and investment policies to determine Fund Name Rule applicability
- Consult with Fund Counsel to ensure fund names and investment strategies align with the updated rule requirements or determine that the Fund Names Rule does not apply to a fund
- Revise investment and compliance policies and procedures (as applicable)
SEC Division of Enforcement-Related Matters
Updates to Enforcement Manual
On February 24, 2026, the SEC announced significant updates to its Enforcement Manual, underscoring the SEC’s ongoing commitment to fairness, transparency, and efficiency in the investigations conducted by the Division of Enforcement (the “Division”). The SEC announced that the Enforcement Manual, which was last revised in 2017, will undergo yearly reviews going forward. Updates to the Enforcement Manual include changes in the following areas:
- Ensuring a uniform Wells process;
- Facilitating simultaneous consideration of settlement recommendations and waiver requests; and
- Additional updates related to a framework for evaluating cooperation, including the impact of cooperation of civil penalties, updates regarding the formal order process and an updated framework for referrals to criminal authorities and other changes intended to conform the Enforcement Manal to current best practices within the Division.
SEC’s Division of Enforcement Announces Updates to Enforcement Manual
Director of Enforcement Division Resignation and Appointment of Successor
On March 16, 2026, the SEC announced that Judge Margaret A. Ryan resigned from her role as Director of the Division and that Principal Deputy Director Sam Waldon had been named Acting Director of the Division. On April 8, 2026, the SEC announced that David Woodcock has been appointed Director of the Division, effective May 4, 2026. Mr. Woodcock, a partner in the Dallas and Washington, D.C. offices of Gibson, Dunn & Crutcher LLP, serves as chair of the firm’s Securities Enforcement Practice Group. The SEC noted that Sam Waldon would continue to serve as Acting Director of the Division until May 4, 2026.
SEC Announces Enforcement Division Director Judge Margaret A. Ryan Has Resigned From Agency
SEC Appoints David Woodcock as Director of Division of Enforcement
SEC Announces Fiscal Year 2025 Enforcement Results
On April 7, 2026, the SEC announced enforcement results for the fiscal year that ended on September 30, 2025. During fiscal year 2025, the Commission filed 456 enforcement actions, including 303 standalone actions and 69 “follow-on” administrative proceedings seeking to bar or suspend individuals from certain functions in the securities markets based on criminal convictions, civil injunctions, or other orders, and obtaining orders for monetary relief totaling $17.9 billion. These enforcement actions, addressing a broad range of misconduct, demonstrate the Commission’s prioritization of cases that directly harm investors and the integrity of the US securities markets, including offering frauds, market manipulation, insider trading, issuer disclosure violations, and breaches of fiduciary duty by investment advisers.
The results do not include the 1,095 matters in which potentially violative conduct was investigated and which were closed, the several matters where market participants remediated their practices, or cases that were otherwise not pursued.
Going forward, enforcement priorities and results will be linked to the Commission’s and the Division’s core mandate, and will thus contemplate the following elements to fulfill its mission: standing up to fraud in its many forms and those market participants engaged in such misconduct; addressing the fraudulent and manipulative conduct of the parties in question through appropriate remediation; and repaying investors’ losses when harmed.
The Division continues to focus on protecting retail investors, holding individual wrongdoers accountable, combatting securities fraud wherever it occurs, safeguarding markets from abusive trading, and deploying resources judiciously as to emerging technologies.
SEC Announces Enforcement Results for Fiscal Year 2025
SEC Issues Names Rule FAQ
Fund of Funds FAQs – Is the SEC hiding the ball here?
The Fund of Funds rules originally were passed to prevent overly complex multi-tier fund structures, layering of fees, and control of a Fund by another Fund. The foundation of the Fund of Funds rules is the “3/5/10 rule,” whereby Section 12(d)(1)(A) of the ’40 Act states that an acquiring Fund: (i) cannot own more than 3% of an acquired Fund’s outstanding shares; (ii) cannot invest more than 5% of its total assets in a single acquired fund; and (iii) cannot invest more than 10% of its total assets in acquired funds in the aggregate. These restrictions are mitigated by safe harbors within the rules.
On March 5, 2026, the SEC answered certain Frequently Asked Questions related to Rule 12d1-4 under the ’40 Act. The Rule was passed to codify existing exemptive order relief into law and to amend certain existing safe harbors within the Fund of Funds rules.
FAQ: Must an acquiring fund that is a management company enter into a fund of funds investment agreement with an acquired fund if its acquisition of the acquired fund would exceed the 5% or 10% limits of Section 12(d)(1)(A)(ii) or (iii) of the Act but not the 3% limit of Section 12(d)(1)(A)(i) of the Act (assuming that the two funds do not share the same investment adviser)?
ANSWER: Surprisingly, the SEC’s answer was “Yes.” The answer was, however, qualified to state that the answer is Yes if you are relying on Rule 12d1-4 to get relief from the 3/5/10 Rule. The SEC conspicuously left out the fact that most unaffiliated Funds of Funds rely on the exemption provided under Section 12(d)(1)(F) under the ’40 Act, which expressly allows for exceedance of the 5% and 10% limits without having to enter into an investment agreement with the acquired fund, as long as the acquiring fund mirror votes and does not exceed 3% ownership; however, owning more than 3% of the acquired fund’s outstanding shares, even under Section 12(d)(1)(F), would then require an investment agreement. The SEC also noted that its answer would not change if the acquiring Fund were a Unit Investment Trust.
Another FAQ noted that an acquiring fund is not required to enter into investment agreements with acquired funds in which it had invested prior to relying on Rule 12d1-4, provided that the acquiring fund does not purchase additional shares of such acquired funds in reliance on Rule 12d1-4. Here, the SEC also did not mention Section 12(d)(1)(F), as an alternative.
Finally, the last FAQ related to the general prohibition against the “Fund of Funds of Funds” structure, noting that investments in CLO debt securities by an acquired fund would not raise the concerns underlying the three-tier prohibition. Accordingly, the SEC staff would not recommend enforcement action if a target fund does not count investments in CLO debt securities towards the 10% bucket in Rule 12d1-4(b)(3)(ii).
Fund of Funds Arrangements Frequently Asked Questions
SEC Grants ETF Share Class Exemptive Relief to Broker-Dealers
On March 17, 2026, the SEC issued exemptive relief that was requested by the Investment Company Institute (“ICI”). The exemptive relief is from requirements of Section 11(d)(1) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and Rules 10b-10 and 14e-5 thereunder (collectively, the “Exchange Act Provisions”) on behalf of broker-dealers. The ICI had requested relief from the Exchange Act Provisions that is similar to the relief previously granted to broker-dealers engaging in certain other transactions in exchange-traded fund (“ETF”) securities that rely on Rule 6c-11 under the ’40 Act. Specifically, the ICI requested exemptive relief from Exchange Act Provisions for broker-dealers that engage in certain creation and redemption transactions involving ETF Shares of a Multi-Class ETF that have received a Multi-Class ETF exemptive order, as well as certain limited secondary market transactions in ETF Shares of a Multi-Class ETF. The ICI requested exemptive relief that is similar to the exemptive relief under Rule 6c-11 under the ’40 Act. The SEC granted the requested relief, provided broker-dealers comply with the following requirements:
- A Multi-Class ETF must have received a Multi-Class ETF exemptive order subject to a condition to operate its ETF Class as an ETF in compliance with the requirements of Rule 6c-11 with the following exceptions:
- Mutual Fund Shares will not be listed on any national securities exchange, and
- The Multi-Class ETF may offer an exchange privilege, meaning shareholders would be allowed to exchange Mutual Fund Shares for ETF Shares.
- The ETF Class must further satisfy the Internal Revenue Code diversification requirement for regulated investment companies.
- Broker-dealers relying on exemptive relief from the Exchange Act Provisions must meet certain conditions specific to each Exchange Act Provision related to in-kind creations and redemptions.
- Relief from the Exchange Act Provisions granted to broker-dealers does not apply to purchases or sales of ETF Class Shares in the secondary market.
SEC Clarifies Application of Federal Securities Laws to Crypto Assets
On March 17, 2026, the SEC, joined by the Commodity Futures Trading Commission, issued an interpretive release clarifying how existing federal securities laws apply to crypto assets and certain transactions in crypto assets, aiming to reduce long‑standing regulatory uncertainty. The interpretation affirms that most crypto assets are not themselves securities, while emphasizing that certain transactions involving crypto assets may constitute “investment contracts” under the Howey test depending on the facts and representations involved, and that such contracts can begin—and later end—over time. The release introduces a clear taxonomy of crypto assets (including digital commodities, digital collectibles, digital tools, stablecoins, and digital securities), explains how non‑security crypto assets may fall under or exit securities regulation, and provides specific guidance on activities such as crypto asset disseminations known as “airdrops”, protocol mining and staking, and asset “wrapping.” The interpretation marks an important step towards providing clarity on the application of the federal securities laws to crypto assets.
SEC Interpretative Release on Crypto Assets
Investment Company Institute’s 2026 Investment Management Conference
The Investment Company Institute’s 2026 Investment Management Conference (the “Conference”) was held from March 22, 2026 to March 25, 2026 in Palm Desert, California. Discussions at the Conference reflected a clear regulatory focus on modernizing fund regulations to better align with how products are structured, distributed, and overseen today. In addition to broader conversations around updating the ’40 Act, panels addressed the continued expansion of retail investor access to private funds, growing adoption of ETF share classes, and recent regulatory developments affecting product design and disclosure, including implementation of the amended Fund Names Rule. Across these topics, regulators and industry participants emphasized the importance of clarity, consistency, and investor understanding as product structures evolve.
Several sessions also focused on compliance challenges arising from innovation and operational change. Speakers discussed emerging best practices for the use of artificial intelligence in compliance and operations, with an emphasis on governance, oversight, and risk management rather than wholesale prohibition. Alongside sustained momentum toward default electronic delivery and continued scrutiny of fund proxy processes, the Conference reinforced that compliance teams will play a central role in operationalizing regulatory change—ensuring new technologies, product features, and disclosures are implemented in a manner consistent with regulatory expectations and investor protection goals.
Key Takeaways from 2026 ICI Investment Management Conference
SEC PROPOSED RULES
SEC Proposes Amendments to Form N-PORT
On February 18, 2026, the SEC announced proposed amendments (the “Proposed Amendments”) to certain registered investment company reporting requirements on Form N-PORT. Comments relating to the Proposed Amendments need to be submitted on or before April 24, 2026. The Proposed Amendments, if adopted, would, among other things:
- Provide reporting funds with an additional 15 days to file reports on Form N-PORT of portfolio-related information, extending the monthly filing deadline from within 30 days to 45 days of month end;
- Reduce the frequency of publication of reports on Form N-PORT from monthly (within 60 days of each month end) to quarterly (within 60 days after fiscal quarter end);
- Remove or streamline certain reporting items, including modifications to portfolio level risk metrics and return information and removal of reporting requirements related to Rule 35d-1 under the ’40 Act (the Names Rule); and
- Add certain identifying information, such as ticker symbols as well as additional information regarding reporting funds with share classes that operate as ETFs (g., the ETF class’s net assets and shareholder flows).
Concurrently, but in a related adopting release, the SEC extended the compliance dates for the Form N-PORT reporting requirements related to the Names Rule, allowing time for the Proposed Amendments to be considered prior to reporting funds incurring additional costs for reporting requirements that may be eliminated. The compliance dates for the Names Rule-related reporting requirements on Form N-PORT have been extended to November 17, 2027, for reporting fund groups with net assets of $10 billion or greater and May 18, 2028, for reporting fund groups with less than $10 billion in net assets, both determined as of the end of a reporting fund group’s most recent fiscal year end.
Fact Sheet – N-Port Reporting and Names Rule Extension
Proposed Rule – Form N-PORT Reporting
SEC FINAL RULES
SEC Issues Guidance on Tokenized Securities and approves NASDAQ’s Tokenized Securities Trading Proposal
The SEC released a joint statement of the Division of Corporation Finance, Division of Investment Management, and Division of Trading and Markets on January 28, 2026 clarifying the application of federal securities laws to tokenized securities. This guidance distinguishes between issuer‑sponsored tokenization, where issuers directly integrate distributed ledger technology, and third‑party models such as custodial tokens backed by held securities as well as synthetic tokens that mimic economic exposure. The SEC clearly states that the format in which a security is issued or the methods by which holders are recorded (e.g., onchain vs. offchain) does not affect application of the federal securities laws.
As part of a broader framework, in December 2025, the SEC granted the Depository Trust Company a no-action letter allowing participants and their customers “to explore DLT (digital ledger technology) and its potential benefits for recording their DTC-held securities, in a controlled production environment, under conditions designed to allow adjustment and refinement, limit risk of loss and systemic disruption, and provide broader insights as to the technical and regulatory features necessary to allow Tokenized Entitlements at scale.” The SEC no-action letter would be effective for three years following the launch of this pilot program, expected to occur in the second half of 2026. Additionally, NASDAQ has aligned its efforts with the DTC pilot program through a proposed rule change which enables the trading of tokenized securities on its exchange and clarifies the process for trading under the DTC pilot securities tokenization program.
Together, the SEC’s guidance and these coordinated infrastructure changes appear to signal openness to blockchain‑based modernization while maintaining regulatory standards.
SEC Statement on Tokenized Securities
¹For a new fund, compliance is required on the effective date of the initial registration statement on or following June 11, 2026. For existing funds, at the time of the effective date of its first “on-cycle” annual prospectus update filed on or following June 11, 2026.
COD00001013 4/28/2026
