A compendium of regulatory matters for Q3 2025.

SEC Staff Updates Guidance on Section 13 Beneficial Ownership Reporting Rules

On July 11, 2025, the staff of the U.S. Securities and Exchange Commission’s (the “SEC” or the “Commission”) Division of Corporation Finance published non-substantive updates to various Compliance and Disclosure Interpretations (“C&DIs”) relating to Sections 13(d) and 13(g) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and Regulations 13D and 13G Beneficial Ownership Reporting.

These updates align the C&DIs with amendments to Regulations 13D and 13G adopted in October 2023. Among other items, the 2023 amendments accelerated the filing requirements for Schedules 13D and 13G. For example, qualified institutional investors that have acquired beneficial ownership of more than 5% (but less than 10%) of a company’s equity securities are now required to file an initial Schedule 13G within 45 days of the end of the quarter in which beneficial ownership exceeded 5%, as opposed to 45 days after the end of the year. Accordingly, most of the changes to the C&DIs reflect updates to the required timing of initial and amended Schedules 13D or 13G, notably including changing from the “prompt” filing of Schedule 13D amendments to the new two (2) business day requirement of Rule 13d-2(a) under the Exchange Act.

SEC.gov | Exchange Act Sections 13(d) and 13(g) and Regulation 13D-G Beneficial Ownership Reporting

SEC Permits In-Kind Creations and Redemptions for Crypto ETPs

On July 29, 2025, the SEC voted to approve orders to permit in-kind creations and redemptions by authorized participants for crypto asset exchange-traded product (“ETP”) shares.

The SEC’s orders reflect a departure from recently approved spot bitcoin and ether ETPs, which were limited to creations and redemptions on an in-cash basis. With the approval orders, bitcoin and ether ETPs, consistent with other commodity-based ETPs approved by the Commission, will be permitted to create and redeem shares on an in-kind basis.

The Commission also voted to approve other orders that advance a merit-neutral approach to crypto-based products, including exchange applications seeking to list and trade an ETP that would hold mixed spot bitcoin and spot ether, options on certain spot bitcoin ETPs, Flexible Exchange options on shares of certain bitcoin-based ETPs, and an increase of position limits up to the generic limits for options (up to 250,000 contracts) for listed options on certain bitcoin ETPs. Additionally, the Commission issued two scheduling orders soliciting comments in support of, or in opposition to, the SEC’s Division of Trading and Market’s approval, pursuant to delegated authority, of a national securities exchange’s proposals to list and trade two large-cap crypto-based ETPs.

SEC.gov | SEC Permits In-Kind Creations and Redemptions for Crypto ETPs

SEC Chairman Atkins’ Policy Address – Project Crypto

On July 31, 2025, at the America First Policy Institute, SEC Chairman Atkins unveiled Project Crypto, an initiative which seeks to modernize securities regulation and support the Executive Branch’s vision for the U.S. as the “crypto capital of the world.”

Support for the GENIUS Act and Market Structure Legislation

Chairman Atkins highlighted that the Commission would reject “regulation-by-enforcement” in favor of clear, proactive rulemaking. He directed SEC staff to draft rules for crypto asset distribution, custody, and trading; collaborate with the Crypto Task Force on rule proposals aligned with the report from the President’s Working Group on Digital Asset Markets; and use interpretative and exemptive authority to avoid stifling innovation.

Bringing Crypto Asset Distributions Back to the U.S.

Chairman Atkins called for a comprehensive regulatory framework to reduce reliance on offshore structures. He instructed staff to clarify when a crypto asset qualifies as a security; propose tailored disclosures and safe harbor mechanisms; support tokenization of traditional securities for U.S. distribution; and he emphasized that most crypto assets are not securities, and even when they are, regulation should encourage development, not deter it.

Custody and Trading Venue Flexibility

Chairman Atkins advocated for maximum choice, including self-custody, which he called a “core American value.” He is seeking to modernize custody rules for crypto assets; allow efficient licensing across business lines; and promote regulatory flexibility that protects investors without unnecessary burdens.

Horizontal Integration and Super-Apps

Chairman Atkins prioritized enabling “super-apps” — platforms offering a wide range of crypto and traditional financial services under one license. He asserted that SEC-registered venues can already list non-securities and directed staff to develop guidance for super-apps; create frameworks for side-by-side trading of securities and non-securities; and explore allowing non-security crypto assets on non-registered venues.

Integrating On-Chain Systems

Chairman Atkins called for updates to outdated rules to support decentralized systems, including automated market makers. He emphasized that regulation should not impose intermediaries where they are not needed. He proposed clarifying the roles of software publishers and intermediaries and suggested potential amendments to Regulation NMS to accommodate tokenized securities.

Commercial Viability and the Innovation Exemption

Chairman Atkins proposed a principles-based “innovation exemption” to allow new technologies to enter the market quickly. Conditions could include periodic reporting, whitelisting or verified participant pools, and standards-based limitations (e.g., ERC-3643 compliance). He urged both SEC staff and market participants to focus on practical implementation and market readiness.

SEC.gov | American Leadership in the Digital Finance Revolution

President Trump Signs Executive Order on Private and Alternatives Investments in 401(k) Retirement Plans

On August 7, 2025, President Trump issued an executive order (the “Order”) that allows investors in 401(k) plans and other retirement plans greater access to private and alternative investments. The Order directs the Labor Department to reassess existing guidelines on alternative assets in retirement plans and clarify the related fiduciary responsibilities. The Order also instructs the Labor Department to work alongside other agencies, such as the SEC and the Treasury Department, in deciding what rule changes are needed.

The Order begins the process for American retirement savers to access a wider range of non-traditional private and alternative investments. Proponents say that access to private and alternative investments could lead to greater diversification in retirement portfolios and greater returns. However, detractors say that private and alternative investments typically are less liquid, charge higher fees, and are often less transparent than investments in a traditional, publicly traded stock and bond portfolio. Either way, the Order paves the way for more retirement plan investors to decide for themselves if, and to what extent, private and alternative investments have a place in their retirement portfolios.

Democratizing Access to Alternative Assets for 401(K) Investors – The White House

ICI Letter to SEC Chairman Atkins regarding Rule 17a-7 Amendments

On August 7, 2025, the Investment Company Institute (“ICI”) recommended the modernization of Rule 17a-7 under the Investment Company Act of 1940, as amended (the “1940 Act”) to permit investment companies to cross trade fixed income securities. The cross trading of fixed income securities by investment companies was previously allowed, subject to numerous conditions, prior to the adoption of an unrelated 2020 SEC rule and guidance on valuation. Language in Rule 2a-5 under the 1940 Act (the “Valuation Rule”) required that a security must have a “readily available market quotation” in order to be eligible for cross trading. This language significantly limited funds’ ability to perform cross trades of fixed-income securities. It has been estimated that cross trading of fixed income securities generated over $300 million in cost savings to funds and their shareholders.

Following the adoption of the Valuation Rule, the SEC appeared poised to fix the collateral damage caused by the rule and opened a comment file on the topic of cross trading fixed income securities. The SEC, however, took no action and the topic was dropped from its rulemaking agenda. Now, the ICI is once again optimistic about the return of cross trading fixed income securities under the SEC’s new leadership.

An important distinction of the current ICI proposal is that they are recommending that in addition to funds using dealer quotes to price securities for cross trading, they should also be allowed to use other reliable pricing sources including evaluated prices that are provided by independent pricing sources. Pricing services have long provided end-of-day prices for investments for the calculation of fund net asset values, but increasingly, they are also providing more frequent intraday pricing, which would be beneficial for cross trading. The volume and quality of fixed-income trading data has significantly advanced in recent decades, and as fixed-income exchange-traded funds (“ETFs”) continue to grow in popularity, their creation and redemption activity and secondary market trading is enhancing price discovery in fixed income markets, which translates to higher pricing accuracy.

The ICI proposal also addresses the use of sub-advisers and the topic of fees that could be associated with some cross trades. The ICI supports the ability for funds to pay reasonable custodial or other fees in connection with cross trades and allow for cross trades where one or more of the transacting parties is a sub-adviser.

All of the recommended changes would likely require that funds and advisers adopt policies and procedures that take a risked based approach to evaluating pricing and overseeing cross trades. Modernizing Board reporting requirements could also help facilitate better Board oversight of cross trades moving forward.

https://www.ici.org/system/files/2025-08/25-cl-recommendations-on-rule-17a-revisions.pdf

Accounting and Disclosure Information (ADI) Document – Registered Closed End Funds of Private Funds

On August 15, 2025, the SEC’s Division of Investment Management (the “Division”) issued Accounting and Disclosure Information (ADI) 2025-17, announcing a policy shift for registered closed-end funds’ investment in private funds. Registered closed-end funds that invest in private funds (“CE-FOPFs”) have increased in number and evolved since the first CE‑FOPF registration statement became effective in 2002. Often in response to comments of Division staff, CE‑FOPFs that invest 15% or more of their assets in private funds have limited their offers to investors who qualify as “accredited investors” and have required minimum initial investments of at least $25,000. Investors in CE-FOPFs who indirectly invest in private funds have regulatory protections under the federal securities laws that differ from the safeguards afforded to direct investors in private funds. The 1940 Act, which applies to CE-FOPFs, and the rules promulgated thereunder, also set forth requirements designed to protect investors.

The SEC staff published this ADI to highlight areas that the staff, when reviewing CE-FOPF registration statements, has focused on — and will continue to focus on — to promote retail investor understanding of CE‑FOPFs in making informed investment decisions. The staff wants to emphasize that, registration statement disclosures should be clear, concise, and understandable, and must comply with the Commission’s “plain English” rule.

SEC.gov | ADI 2025-16 – Registered Closed-End Funds of Private Funds

Fee Rate Advisory – Section 6(b) Filing Fee Rate Advisory (effective October 1, 2025)

On August 25, 2025, the SEC announced that the fees that public companies and other issuers pay to register securities will decrease from $153.10 per million to $138.10 per million. This fee decrease is effective October 1, 2025. The fee decrease is applicable to the registration of the following securities;

• Registration of securities under Section 6(b) of the Securities Act of 1933, as amended (the “1933 Act”);
• Repurchase of securities under Section 13(e) of the Exchange Act; and
• Proxy solicitations and specified tender offers under Section 14(g) of the Exchange Act.

SEC.gov | Section 6(b) Filing Fee Rate Advisory for Fiscal Year 2026

SEC Names Judge Margaret Ryan as Director of the Division of Enforcement

Effective September 2, 2025, Judge Margaret “Meg” Ryan has been named Director of the SEC’s Division of Enforcement. Acting Director of Enforcement, Sam Waldon, returned to his previous role as Chief Counsel for the Division.

Judge Ryan was a senior judge of the United States Court of Appeals for the Armed Forces. She was nominated to the court in 2006 by President George W. Bush, was confirmed by the United States Senate, and served the entirety of her term through July 2020. She reached senior status in August 2020. Judge Ryan currently is a lecturer on military law and justice at Harvard University Law School. She was a visiting professor at Notre Dame Law School and lecturer at The George Washington University Law School.

“It is my honor to join the Commission as Director of the Division of Enforcement,” said Judge Ryan. “I look forward to joining the Commission in its important work to ensure that the Division is true to the SEC’s mission in taking action on behalf of investors harmed by those who break the securities laws and providing an effective deterrent against fraudulent and manipulative activities in our financial markets.”

Before her tenure as judge, she was a partner at two law firms, Wiley Rein & Fielding and Bartlit Beck Herman Palenchar & Scott. She previously served as a law clerk to Supreme Court of the United States Associate Justice Clarence Thomas and to Judge J. Michael Luttig of the United States Court of Appeals for the Fourth Circuit. Following law school, Judge Ryan was a judge advocate in the U.S. Marine Corps (USMC) and earlier in her career was an active-duty USMC communications officer including deployments to the Philippines and Desert Shield/Desert Storm. She served as aide-de-camp to Marine Corps Commandant General Charles C. Krulak from 1997 to 1999. Judge Ryan received a B.A. cum laude in political science from Knox College and a J.D. summa cum laude from the University of Notre Dame Law School, where she graduated first in her class and was an editorial board member of the Notre Dame Law Review. She is an elected member of the American Law Institute.

SEC.gov | SEC Names Judge Margaret Ryan as Director of the Division of Enforcement

SEC and CFTC Joint Statement on Spot Crypto Asset Trading

On September 2, 2025, the SEC and the Commodity Futures Trading Commission (the “CFTC”) released a Joint Statement clarifying that exchanges registered under both agencies are permitted to facilitate trading of certain spot crypto asset products. This move reflects a coordinated effort to expand trading options and foster innovation in U.S. crypto markets.

SEC Chairman Paul Atkins emphasized that the statement marks a major advancement in crypto innovation in the U.S., asserting that market participants should be free to choose their trading venues for spot crypto assets. He reaffirmed the SEC’s commitment to working with the CFTC to ensure that regulatory frameworks do not stifle innovation and competition.

CFTC Acting Chairman Caroline D. Pham stated that prior administrations discouraged innovation. She declared that this era has ended and praised the current collaborative approach — aligned with President Trump’s vision of making the U.S. a global leader in crypto. She described the joint statement as a clear signal of continued support for growth in digital asset markets, with more initiatives to follow.

The SEC and the CFTC are jointly working to enable spot crypto asset trading on registered exchanges. This initiative is part of the SEC’s Project Crypto and the CFTC’s Crypto Sprint, building on recommendations from the President’s Working Group on Digital Asset Markets report titled “Strengthening American Leadership in Digital Financial Technology.”

SEC.gov | SEC-CFTC Joint Staff Statement (Project Crypto-Crypto Sprint)

SEC Unveils Spring Regulatory Agenda Under Chairman Atkins

On September 4, 2025, the SEC’s newly released Spring regulatory agenda, led by Chairman Atkins, marks a strategic shift in priorities. Many items from the previous agenda were withdrawn, with Chairman Atkins emphasizing the need for “smart, effective, and appropriately tailored” regulation. The updated agenda prioritizes streamlining disclosure requirements and modernizing the shareholder proposal process, while scaling back focus on ESG and climate-related initiatives. A central focus is aimed to establish clearer rules for the rapidly evolving crypto asset market. Several proposed rules address crypto asset classification, market structure, and custody standards. Broader modernization efforts include updates to custody and transfer agent regulations to reflect digital assets and distributed ledger technologies. Additionally, the SEC plans to finalize a rule requiring investment advisers to implement customer identification programs in line with the Bank Secrecy Act. These initiatives reflect the SEC’s intent to provide regulatory clarity in emerging markets while easing unnecessary compliance burdens.

SEC.gov | Statement on the Spring 2025 Regulatory Agenda

ICI Letter to Chairman Atkins regarding Factors to Consider in Future Proxy Reform

On September 17, 2025, the ICI sent a letter to SEC Chairman Atkins, outlining key factors to consider in future proxy reform. The ICI’s letter emphasized the need for the SEC to address the challenges faced by funds and advisers, particularly in the context of the 2026 proxy season. The ICI’s recommendations include reforms that promote efficiency, well-informed proxy voting decisions, and greater transparency while safeguarding advisers fiduciary duties. The ICI also calls for the SEC to recognize the unique role of funds and advisers, build on prior SEC guidance, modernize the fund proxy process, and support closed end funds.

https://www.ici.org/system/files/2025-09/25-cl-sec-proxy-reform-guidance.pdf

SEC Investment Advisory Committee Endorses Registered Funds for Retail Access to Private Markets

In a report issued on September 18, 2025, the SEC’s Investment Advisory Committee (the “IAC” or “Committee”) endorsed registered funds as the best way for retail investors to obtain access to private markets. The Committee notes that the private capital markets have grown at a rapid pace in recent years and that, given their current size and the investment opportunities they contain, the question of facilitating retail investor access has been raised with increased frequency by investors, market participants, legislators and policymakers. The Committee noted that it finds that this development necessitates a recalibration of the existing regulatory framework, which was designed for a world in which the public markets encompassed the vast majority of all investment opportunities. Importantly, the Committee believes that this recalibration should not undermine any of the three pillars of the SEC’s mission: protecting investors, maintaining fair, orderly, and efficient markets, and facilitating capital formation.

In the Committee’s view, the optimal way for retail investors to access private market assets is through registered funds. Therefore, the Committee is recommending changes to SEC staff interpretations and/or rules under the 1940 Act to allow registered funds to better facilitate investing in private market assets. While the Committee does not take a position on the desirability of expanding retail investors’ access to private market assets in direct ways, it notes that, if the SEC were to determine that such an expansion is warranted, the Committee firmly believes that it should be accompanied by certain basic investor protection guardrails. The Committee is also recommending various improvements to the registered fund regulatory framework as part of any expansion that enables retail investors to more easily invest in private market assets.

https://www.sec.gov/files/iac-private-markets-091125.pdf

SEC Issues Notice of Intent to Grant ETF Share Class Relief

On September 29, 2025, the SEC issued notice that it intends to grant an investment adviser (“Adviser”), and potentially over 70 other issuers who have filed for similar exemptive relief, the ability to offer an ETF share class of mutual funds. The ETF share class relief is comprised of two parts: ETF operational relief (Rule 6c-11 under the 1940 Act) and multi-share class relief (Rule 18f-3 under the 1940 Act).

ETFs have been an investor favorite due to the relatively low cost, transparency, and tax efficiency with over $11 trillion dollars in total assets and more ETFs listed on U.S. exchanges than individual stocks. This dual share class structure may provide meaningful benefits including economies of scale, tax-efficient transactions between the ETF and mutual fund share classes, and access to different liquidity profiles within the fund. While the new ETF share class brings an exciting innovation to the industry, it also brings unique and complicated operational challenges that will require careful analysis.

The Adviser’s latest amended application requesting ETF Share Class Relief included a discussion of declaring dividends daily for the mutual fund class and monthly for the ETF class. It also lays out a three-part governance framework for the Adviser and Board to oversee the multi-class funds which includes: (1) an initial comprehensive written report to the Board; (2) numerical thresholds for the fund to maintain; and (3) and an annual review to determine the multi-class structure remains in the best interest of all shareholders. The Adviser’s application also addressed concerns stated by the SEC and will be subject to nine conditions, as listed in the application (https://www.sec.gov/edgar/search/#/q=812-15484):

1. A Multi-Class ETF Fund will operate an ETF Class as an ETF in compliance with the requirements of Rule 6c-11, except that a Multi-Class ETF Fund will list only one class of its shares on an exchange and also may offer an exchange privilege (as described in the application), and will comply with the requirements of Form N-1A and reporting forms such as Form N-CEN applicable to ETFs that rely on Rule 6c-11.
2. A Multi-Class ETF Fund will comply with Rule 18f-3, except to the extent that the ETF Class and Mutual Fund Class have different rights and obligations as described in the application. As required by Rule 18f-3, before the first issuance of ETF shares, and before any material amendment of a written plan under Rule 18f-3 to include an ETF Class, a majority of the directors of a fund, and a majority of the independent directors, shall find that the plan is in the best interests of each Mutual Fund Class and the ETF Class individually and of the Multi-Class ETF Fund as a whole.
3. To assist in the initial Board consideration of the appropriateness of operating a Multi-Class ETF Fund that has both an ETF Class and Mutual Fund Class(es), the Adviser shall prepare and deliver to the Board the Initial Adviser Report as described in the application. The Initial Adviser Report will assist the Board in its finding pursuant to condition 2 and in evaluating the potential for any conflicts between the Mutual Fund Class(es) and the ETF Class based on current and historical information, as applicable.
4. The Adviser will recommend for the Board’s approval the Ongoing Monitoring Process designed to help determine whether a Multi-Class ETF Fund has encountered any issues relating to the multi-class structure, including any conflicts between the Mutual Fund Class(es) and the ETF Class.
5. Each Multi-Class ETF Fund will be subject to an Ongoing Monitoring Process that is approved by the Board, and the Board of the Multi-Class ETF Fund periodically, but no less frequently than annually, will evaluate the multiple class plan of the Multi-Class ETF Fund. A majority of the directors of a Multi-Class ETF Fund, and a majority of the independent directors, shall find that the multiple class plan continues to be in the best interests of each Mutual Fund Class and the ETF Class individually and of the Multi-Class ETF Fund as a whole.
6. To inform the Board’s periodic evaluation, the Adviser shall prepare and deliver to the Board of the Multi-Class ETF Fund the Ongoing Adviser Report as described in the application. The Board will consider whether the Ongoing Adviser Report suggests any issues relating to the multi-class structure, including conflicts between the Mutual Fund Class(es) and the ETF Class, that require additional board action.
7. Each Multi-Class ETF Fund will take the “Disclosure Steps” outlined in the application.
8. In addition to complying with Rule 6c-11(d) under the 1940 Act, each Multi-Class ETF Fund will preserve for a period not less than six years, the first two in an easily accessible place, (i) any documents created pursuant to the requirements in conditions 2, 3, 5, and 6; and (ii) any documents created pursuant to the Ongoing Monitoring Process that evidence a Multi-Class ETF Fund has exceeded or not exceeded an established threshold, as well as any documents provided to the Board as part of the Ongoing Monitoring Process.
9. The requested ETF operational relief and ETF Class Relief to operate one or more Multi-Class ETF Funds will expire on the compliance date (or such other date established by the SEC) of any SEC rule under the 1940 Act that provides relief permitting the operation of a Multi-Class ETF Fund structure.

SEC Issues Notice of Intent to Grant ETF Share Class Relief

SEC Probes Interval Fund Valuation, Liquidity

On September 29, 2025, Ignites, a subscription-based publication, published an article regarding interval fund valuation and liquidity. Interval funds^[1] are a distinctive category of closed-end funds designed to provide investors with access to illiquid and alternative asset classes, all while maintaining a structured and predictable redemption process. Unlike traditional open-end funds, which offer daily liquidity, interval funds allow investors to redeem shares at predetermined intervals, typically on a quarterly, semi-annual, or annual basis. This limited liquidity structure enables fund managers to pursue long-term investment strategies in less liquid assets, such as private equity, real estate, or credit instruments, without the pressure of daily redemption demands.

According to data from The Interval Fund Tracker, as noted in the Ignites article, 58 of the 154 active interval funds were launched in 2024 or 2025. The article notes that the SEC has begun examinations of interval funds, and that exam letters have asked for items relating to the following areas:

• Valuation Practices. Detailed records on valuation policies, repurchase-offer materials, pricing models, Level 3 holdings, price overrides, and board materials related to valuation decisions.
• Governance & Oversight. Requests include board meeting minutes, CCO reports, information relating to internal audits, and information on third-party vendor relationships.
• Operational Transparency. Requests for trade blotters, co-investment records, cross-trades, fees, expenses, and client account data.

Retail Access to Private Assets:

The exams reflect growing scrutiny as interval funds expand retail access to alternative investments, especially following the elimination of the informal 15% cap on private assets in closed-end funds.

The SEC’s Division of Examinations also mentions valuations within its latest Fiscal Year 2025 Examination Priorities^[2] as it relates to effectiveness of adviser’s compliance programs: “. . . review of an adviser’s compliance program may focus on or go into greater depth depending on its practices or products. For example, if clients invest in illiquid or difficult to-value assets, such as commercial real estate, examinations may have a heightened focus on valuation.”

Implications for advisers to interval funds:

Be prepared for targeted document requests with potential short response windows (as little as 7 days).

• Ensure valuation processes are well-documented and defensible.

SEC Approves TXSE as National Securities Exchange

On September 30, 2025, the SEC granted its approval for the Texas Stock Exchange (“TXSE”, pronounced “Tex-ee”) to operate as a national securities exchange. TXSE was first announced in June 2024 and will be headquartered in Dallas. Texas is home to the headquarters of the second most Fortune 500 companies in the country, leading to Dallas’s newest nickname: “Y’all Street”. TXSE is designed to capitalize on Dallas’s growth as a financial hub, but also provide incentives for non-Texas companies to consider listing in the state. In a press release following it’s SEC approval, TXSE described its mission “to reverse the decades-long decline in the number of U.S. public companies by reducing the burden of going and staying public while maintaining some of the highest quantitative standards in the industry”. The exchange aims to compete with the dominant exchanges, NYSE and NASDAQ, but is also expected to allow companies to dual-list. NYSE has already announced that it would move its Chicago electronic exchange to Dallas and rebrand it as NYSE Texas. TXSE will announce a launch schedule at a later date, but plans to commence trading as soon as 2026.

TXSE Group Inc announces SEC approval of Texas Stock Exchange | Texas Stock Exchange

^[1]Ultimus Fund Solutions – What is an Interval Fund

^[2] SEC Exam Priorities

SEC Institutes Proceedings on Exchange Filing to Remove Annual Meeting Requirement

On May 20, 2025, Cboe BZX Exchange, Inc. (“BZX”) filed with the SEC, pursuant to Section 19(b)(1) of the Exchange Act and Rule 19b-4 thereunder, a proposed rule change to exempt closed-end management investment companies registered under the 1940 Act (“CEFs”) that are listed as of or after May 20, 2025 from the annual meeting of shareholders requirement set forth in Exchange Rule 14.10(f). The SEC is instituting proceedings to determine whether to approve or disapprove the proposed rule change and solicited public comments through September 26, 2025.

The SEC has consistently recognized the importance of the annual shareholder meeting requirement to the protection of investors and the public interest. The BZX proposal states that the annual shareholder meeting is unnecessary for CEFs because the 1940 Act preserves shareholder ability to elect directors, requires independent directors to approve significant actions, and requires a shareholder vote on material governance and policy changes. BZX argues that there is no substantive justification for imposing an annual shareholder meeting requirement on CEFs because no other registered investment companies listed on the Exchange are required to do so.

Federal Register :: Self-Regulatory Organizations; Cboe BZX Exchange, Inc.; Order Instituting Proceedings To Determine Whether To Approve or Disapprove a Proposed Rule Change To Exempt Closed-End Management Investment Companies Registered Under the Investment Company Act of 1940 That Are Listed as of or After May 20, 2025 From the Annual Meeting of Shareholders Requirement Set Forth in Exchange Rule 14.10(f)

Nasdaq Proposes Changes to Initial and Continued Listing Standards

On September 3, 2025, Nasdaq proposed a new set of enhancements to its initial and continued listing standards, reinforcing its long-standing commitment to capital formation while ensuring investor protection and upholding market integrity. These proposed updates introduce enhanced requirements for minimum company public float and capital raised during initial public offerings, alongside stricter suspension and delisting procedures for companies failing to meet Nasdaq’s continued listings standards.

The revised standards include:

• A $15 million minimum market value of public float, applicable to new listings on Nasdaq under the net income standard.
• An accelerated process for suspending and delisting companies with a listings deficiency that also have a Market Value of Listed Securities below $5 million.
• A $25 million minimum public offering proceeds requirement for new listings of companies principally operating in China.

“Investor protection and market integrity are central to Nasdaq’s mission,” said John Zecca, Executive Vice President and Global Chief Legal, Risk & Regulatory Officer. “These enhancements reflect our ongoing commitment to evolve our standards in step with market realities and to lead by example in promoting fair and orderly markets. By increasing our standards for the minimum public float and the public offering raise in certain new listings, it provides a healthier liquidity profile for public investors, while still making emerging companies available to investors through our exchange. These new listing standards represent one step in a necessary, industry-wide effort — alongside regulators, U.S. exchanges, and market participants — to closely examine trading behaviors in small company securities, with the goal of safeguarding market integrity and enhancing protections for investors.”

These actions follow Nasdaq’s proactive review of trading activity – particularly emerging patterns associated with potential pump-and-dump schemes in U.S. cross-market trading environments. The proposed updates are also reflective of how market dynamics and company valuations have evolved over time, prompting the need to recalibrate Nasdaq’s minimum liquidity standards to suit today’s environment. These enhancements ensure that the thresholds for public listings remain relevant and effective as markets evolve.

As part of these changes, Nasdaq is reintroducing a minimum public offering proceeds requirement specifically for companies principally operating in China, building on previous standards set for “restrictive markets,” in which the Public Company Accounting Oversight Board could not inspect auditors. By applying this threshold, Nasdaq strengthens investor protections and enhances the liquidity profile of companies to reflect today’s market environment.

In addition to the enhanced listing standards, Nasdaq will continue to actively refer cases to the SEC and the Financial Industry Regulatory Authority on potentially manipulative trading activities, while strengthening its cooperation with both domestic and international regulators to reinforce effective oversight and maintain high standards across U.S. markets.

Nasdaq is submitting the proposed rules to the SEC for review and, if approved, is proposing to implement the changes to the initial listing requirements promptly. Nasdaq is proposing to give companies already in the initial listing process a period of 30 days to complete the process under the prior standards, and thereafter all new listings will have to meet the new requirements. Regarding the accelerated process for suspending and delisting companies, Nasdaq is proposing to implement the new requirements 60 days after SEC approval.

https://listingcenter.nasdaq.com/assets/rulebook/nasdaq/filings/SR-NASDAQ-2025-068.pdf

https://listingcenter.nasdaq.com/assets/rulebook/nasdaq/filings/SR-NASDAQ-2025-069.pdf

SEC Provides Custody-Related Relief for Registered Investment Advisers and Registered Funds

On September 30, 2025, the SEC issued a no-action letter (the “Letter”) that clarifies how Registered Investment Advisers (“RIAs”), registered investment companies, and business development companies (collectively, “Regulated Funds”) can custody crypto assets in compliance with the custody provisions of the 1940 Act and the Investment Advisers Act of 1940, as amended (the “Advisers Act”). The Letter resolves a significant regulatory ambiguity for RIAs seeking to provide investment advice for crypto assets and for Regulated Funds seeking to invest directly in crypto assets and represents another step by the SEC staff to clarify the application of federal securities laws to crypto assets. Specifically, the Letter confirms that the staff will not recommend enforcement action against RIAs or Regulated Funds that treat certain State Trust Companies as “banks” — and thus qualified custodians eligible to custody crypto assets — for purposes of the custody provisions.

The Letter only represents staff guidance, and thus is not binding on the SEC. To rely on the Letter, an RIA or a Regulated Fund must take the following measurers:

• Prior to engaging the State Trust Company and on an annual basis, the Registered Adviser or Regulated Fund, as applicable, has a reasonable basis, after due inquiry, for believing that:
  • the State Trust Company is authorized by the relevant State Banking Authority to provide custody services for crypto assets and related cash and/or cash Equivalents; and
  • the State Trust Company maintains and implements written internal policies and procedures reasonably designed to safeguard crypto assets and related cash and/or cash equivalents from the risk of theft, loss, misuse, and misappropriation, with such policies and procedures addressing, among other topics, private key management and cybersecurity. In making such a determination, the Registered Adviser or Regulated Fund:
    • receives and reviews the State Trust Company’s most recent annual financial statements and confirms that such financial statements have been subject to an audit by an independent public accountant and have been prepared in accordance with Generally Accepted Accounting Principles; and
    • receives and reviews the State Trust Company’s most recent written internal control report prepared by an independent public accountant during the current or prior calendar year (e.g., SOC-1 report or SOC-2 report) and confirms that such internal control report contains an opinion of such independent public accountant that controls have been placed in operation as of a specific date and are suitably designed and are operating effectively to meet control objectives relating to custodial services, including the safeguarding of crypto assets and related cash and/or cash equivalents during the year;
• The Registered Adviser or Regulated Fund, as applicable, enters into, or causes a Registered Adviser client (“RIA Client”) to enter into, as applicable, a written custodial services agreement with the State Trust Company, which provides that:
  • the State Trust Company will not, directly or indirectly, lend, pledge, hypothecate, or rehypothecate any crypto assets (or related cash and/or cash equivalents) held in custody for the RIA Client or Regulated Fund, as applicable, without the prior written consent of the RIA Client or Regulated Fund, and then only for the account of such RIA Client or Regulated Fund; and
  • all crypto assets (and related cash and/or cash equivalents) held in custody for the RIA Client or Regulated Fund, as applicable, will be segregated from the State Trust Company’s assets;
• The Registered Adviser discloses to its RIA Clients (in the case of a Registered Adviser) or the Regulated Fund discloses to the members of its board of directors or trustees (in the case of a Regulated Fund, as applicable) any material risks associated with using State Trust Companies as custodians of crypto assets (and related cash and/or cash equivalents); and
• The Registered Adviser (with respect to an RIA Client) or the Regulated Fund (and, as applicable, its board of directors or trustees), reasonably determines that the use of the State Trust Company’s custody services is in the best interest of the RIA Client or Regulated Fund and its shareholders, as applicable.

Simpson Thacher & Bartlett LLP

SEC.gov | Simpson Thacher & Bartlett LLP

SEC Enforcement Actions Against Chief Compliance Officers

In July 2025, there were two SEC enforcement actions against investment adviser Chief Compliance Officers (“CCOs”), where the CCOs attempted to cover up prior administrative errors and omissions by altering documents produced for SEC examination staff. The SEC sanctioned the CCOs, resulting in a $40,000 penalty and a three-year bar from compliance or supervisory roles for one CCO (who altered or fabricated trading pre-clearance forms) and a $10,000 penalty, and no bar, for the other CCO (who admitted to drafting, backdating and signing three years of annual compliance reviews). The SEC found in both cases that the CCO’s actions violated recordkeeping requirements under Section 204(a) of the Advisers Act (as well as Section 206(4) and Rule 206(4)-7 with respect to the first action). In 2020, a CCO backdated a compliance memo and withheld contradictory versions thereof, resulting in a $25,000 civil penalty, a three-year prohibition on acting in a compliance capacity and a one-year ban from appearing before the Commission as an attorney.

In addition to document alteration cases, the SEC has charged CCOs as follows: (1) in 2022, for inadequate compliance policies regarding outside business activities, where the CCO failed to enforce proper reporting, leading to violations under Section 206(4) of the Advisers Act, resulting in a $15,000 civil penalty for the CCO and restrictions on future supervisory roles, as well as a $150,000 penalty for the firm; and (2) in 2011, where a firm overcharged clients and failed to properly disclose principal trades. The CCO and management were deemed to have aided and abetted these violations, resulting in a $50,000 civil fine and requirements for comprehensive compliance reviews by independent consultants.

While integrity in recordkeeping protocols can protect CCOs from certain sanctions, there is no substitute for a CCO’s competent, diligent and faithful execution of all aspects of the firm’s compliance program. CCOs should have sufficient resources to execute their critical function in protecting their firms.

SEC.gov | SEC Charges Former CCO For Altering Records Provided to SEC Examiners

SEC.gov | SEC Charges Former Investment Adviser for Failing to Adequately Disclose Conflicts of Interest, Overbilling, and Producing Compliance Documents Backdated by its CCO and President

SEC Enforcement Action under Marketing Rule

On September 4, 2025, the SEC brought its first enforcement action under Chairman Atkins under the Marketing Rule, charging an investment adviser (“Adviser”) with violations alleging that website statements that were inconsistent with disclosures in its Form ADV. The SEC also found that the Adviser violated other provisions of the Advisers Act related to books and records retention and compliance rules.

The SEC found that the Adviser did not keep copies of the advertisements that appeared on its website, in violation of books and records requirements. The Adviser relied on a third-party service provider to maintain its website, but neither the Adviser nor the vendor retained these records.

The Adviser failed to implement the policies and procedures stated in its compliance manual pertaining to reliance on third parties. The manual also stated that the Adviser would conduct annual reviews of their compliance program. The SEC found that the Adviser did not carry out meaningful reviews of its compliance program in either 2023 or 2024 — one review was limited to a review of Form ADV, while the 2024 review relied on an outdated compliance manual which did not meet the requirements of the Marketing Rule.

As a result, the SEC ordered the Adviser to pay a civil monetary penalty of $75,000, along with a cease-and desist order.

Key Takeaways:

• Books and records maintained with third-party firms (in this case the website provider) are subject to SEC inspection
• Annual compliance reviews must be meaningful and documented in a manner that will allow advisers to demonstrate that they are both substantive and complete in the event of an SEC exam
• Be cautious with drafting expansive policies which are difficult to adhere to consistently
• Advertisements should be consistent with disclosures in Form ADV, and other public-facing documents

SEC.gov | SEC Charges Massachusetts-Based Investment Adviser with Marketing, Books and Records, and Compliance Rule Violations

SEC Chairman Atkins’ Statement on Simultaneous Commission Consideration of Settlement Offers and Related Waiver Requests

On September 26, 2025, SEC Chairman Atkins announced a change in the SEC’s policy regarding how the Commission will consider requests for waivers of certain automatic disqualifications in the context of negotiated settlements. In his statement, Chairman Atkins noted that regulated entities seeking a negotiated settlement of an enforcement action may now seek simultaneous consideration by the Commission of the entity’s offer of settlement and request for a waiver. He noted that a return to simultaneous Commission consideration of settlement offers and related waiver requests does not subject the Commission to any obligation to accept a settlement offer and that the Commission may determine not to accept a simultaneous offer of settlement and waiver request for numerous reasons, including because it wishes to consider the settlement and waiver requests independently. Chairman Atkins explained that, if the Commission approves a settlement offer, but not the waiver request, the Commission staff should inform the firm promptly of the Commission’s decision and that the firm would have a short period of time to inform the staff whether it is moving forward with settlement absent a waiver or withdrawing the offer. Chairman Atkins noted that a firm that withdraws a settlement offer may submit an updated settlement offer or potentially face a litigated proceeding.

SEC.gov | Statement on Simultaneous Commission Consideration of Settlement Offers and Related Waiver Requests