SEC Provides Temporary Flexibility to Registered Investment Companies Affected by Coronavirus

The SEC has issued an order that offers “temporary flexibility for registered funds affected by recent market events to borrow funds from certain affiliates and to enter into certain other lending arrangements.” Specifically, the order, which contains temporary exemptions from certain aspects of the Investment Company Act of 1940, provides relief that (1) permits “registered open-end funds and insurance company separate accounts to borrow money from certain affiliates”; (2) allows “additional flexibility under existing interfund lending arrangements and extends the ability to use interfund lending arrangements to funds that do not currently have exemptive relief”; and (3) permits “registered open-end funds to enter into lending arrangements or borrowings that deviate from fundamental policies, subject to prior board approval.”

For more information, see the press release on the SEC’s Web site.