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October 15, 2018 at 05:20 PM
The Securities and Exchange Commission has stated in a recent no-action letter that mutual fund boards can rely on written quarterly chief compliance officer reports affirming that transactions relating to affiliated underwriting, cross-trades and affiliated brokerage comply with applicable rules.
The agency’s Investment Management Division stated in its no-action letter, which reverses a previous 2010 position, that it agreed that the request by the Independent Directors Council “is consistent with the commission’s approach in adopting Rule 38a-1 and would allow boards to avoid duplicating certain functions commonly performed by, or under the supervision of, the CCO.“
The Independent Directors Council’s request sought “to better align the [fund] director responsibilities under the Exemptive Rules with the oversight role that the commission has assigned to fund boards with respect to compliance under Rule 38a-1″ under the Investment Company Act.
