- Chief Compliance Officer and VP of Legal Affairs, Arrow Electronics
By 
Kyle Brasseur2023-09-20T20:01:00
The Securities and Exchange Commission (SEC) adopted amendments to its rule covering fund names to ensure the regulation is appropriate to address new investment drivers, namely environmental, social, and governance (ESG) matters.
The changes to the “Names Rule,” finalized by the agency Wednesday, broaden the scope of the regulation and establish new disclosure and recordkeeping requirements related to the rule. The goal of the amendments is to provide better truth in advertising, as the name of a fund is typically the first piece of information an investor receives.
“The Names Rule reflects a basic idea: A fund’s investment portfolio should match a fund’s advertised investment focus,” said SEC Chair Gary Gensler in a statement. “… Otherwise, a fund’s portfolio might be inconsistent with what fund investors desired when selecting a fund based upon its name.”
The amendments take effect 60 days after publication in the Federal Register. Fund groups with net assets of $1 billion or more must comply within 24 months, while those with net assets of less than $1 billion have 30 months to comply.
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