SEC Makes Technical Amendments to Investment-Company Governance Standards

The SEC has released a final rule that makes technical amendments to a rule under the Investment Company of 1940 that applies to registered investment companies and business development companies (collectively referred to as “regulated funds”). Specifically, the technical amendments reflect in the Code of Federal Regulations a federal court’s vacatur of certain requirements of governance standards related to Investment Company Act Rule 0-1(a)(7) that were adopted in 2001 and amended on September 7, 2004. Namely, the court vacated the requirements that “at least seventy-five percent of the directors of the regulated fund be disinterested” and that “a disinterested director serve as chairman of the board of the regulated fund.” Note that the other amendments to this rule that were made in 2004 that are not subject to the vacatur remain in effect.

For more information, see the statement by SEC Commissioner Mark Uyeda on the SEC’s Web site.