IM Guidance Update

JUNE 2016 | No. 2016-04

BUSINESS CONTINUITY PLANNING FOR REGISTERED INVESTMENT COMPANIES

In this guidance update, the staff of the Division of Investment Management (the 

“Division”) underscores the importance of mitigating operational risks related to 

significant business disruptions, particularly through proper business continuity 

planning for registered investment companies (“funds”). Rule 38a-1 under the 

Investment Company Act of 1940 (“Investment Company Act”) requires funds 

to adopt and implement written compliance policies and procedures reasonably 

designed to prevent violation of the federal securities laws.1

 In the staff’s view, fund 

complexes2 should consider their respective compliance obligations under the 

federal securities laws when assessing their ability to continue operations during a 

business continuity event. 

As discussed below, the importance of proper business continuity planning was 

highlighted in August of 2015 when a systems malfunction at a financial institution 

prevented it from calculating accurate net asset values (“NAVs”) for hundreds of 

mutual funds and exchange-traded funds. Because fund complexes increasingly 

use technologies and services provided by third parties to conduct daily fund 

operations, the staff believes such dependencies and arrangements should be 

considered as part of comprehensive business continuity planning. This guidance 

update discusses a number of measures that the staff believes funds should 

consider as they evaluate the robustness of their fund complex’s plan in order to 

mitigate business continuity risks for funds and investors. 

US Securities and Exchange Commission

 Division of Investment Management
IM GUIDANCE UPDATE 2

Background

Funds are generally externally managed and do not have employees of their own; 

they typically are organized by their primary investment advisers (also known as 

the funds’ “sponsors”), who often manage a number of funds within a fund complex 

and coordinate the activities of other fund service providers. Due to this structure, 

we understand that business continuity planning generally is conducted at the 

fund complex level and typically business continuity plans (“BCPs”) address fund 

activities in conjunction with the activities of the primary investment adviser and 

other service providers that are part of the fund complex.3

Business continuity planning is critical to a fund complex’s (or any business entity’s) 

ability to continue operations during, and recover from, a significant business 

disruption. The development of policies and procedures reasonably designed to 

ensure that an entity’s critical functions and business activities can continue to 

operate in the face of a significant business disruption has long been considered 

an essential aspect of operational risk management.4 For decades, fund complexes 

and their service providers have continued to build and improve practices to create 

resiliencies designed to mitigate the consequences of disruptive events.5 BCPs are 

important tools used by fund complexes and other service providers to prepare for 

significant business disruptions and to address fund compliance obligations during 

such disruptions.6

In recent history, significant business disruptions have impacted the financial 

services industry and, as a result, business continuity and disaster recovery practices 

have appropriately taken on more importance in the industry and have been 

subject to increased focus by regulators.7 In the years since September 11, 2001, the 

Securities and Exchange Commission (“Commission” or “SEC”) has taken numerous 

steps to address business continuity practices in the financial services industry and 

the ability of market participants to continue operations during times of crisis.8

For example, in 2003, the Commission adopted rule 38a-1 under the Investment 

Company Act,9 which, as discussed above, requires funds to adopt and implement 

written compliance policies and procedures.10 In the context of the expected 

elements of a fund’s compliance program, the Compliance Program Adopting 

Release states that funds’ or their advisers’ policies and procedures should address 

the issues identified in that release, including BCPs.11 Additionally, in the wake of 

Hurricanes Katrina and Sandy, Commission staff reviewed, observed, and addressed 

business continuity practices and issued alerts reflecting their observations and 

describing notable practices.12
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As noted above, in August 2015, hundreds of mutual funds and exchange-traded 

funds (“ETFs”) experienced a business continuity event when a systems malfunction 

at a financial institution prevented it from calculating accurate NAVs for these 

funds.13 As a result of this malfunction, the critical third-party provider was unable 

to deliver timely system-generated NAVs or to publish current ETF baskets for 

certain clients for several days.14 Had this outage persisted, the magnitude of this 

event could have been much greater.15 Staff in the Division’s Risk and Examinations 

Office and the Commission’s Office of Compliance Inspections and Examinations 

conducted outreach to the third-party provider, fund and ETF complexes, and select 

intermediaries during the course of the outage and after the incident. The outreach 

revealed that some funds could have been better prepared for the possibility 

that one of their critical service providers would suffer an extended outage.16 This 

outreach also highlighted the importance of robust business continuity planning 

for fund complexes, particularly the need to understand the business continuity 

and disaster recovery protocols of critical fund service providers, and how the fund 

complex’s own BCP addresses the risk that a critical third-party provider could 

suffer a significant business disruption. 

Fund Compliance 

In the staff’s view, fund complexes should consider how to mitigate exposures 

through compliance policies and procedures that address business continuity 

planning and potential disruptions in services (whether provided internally at the 

fund complex or externally by a critical third-party service provider) that could 

affect a fund’s ability to continue operations, such as processing shareholder 

transactions. Because fund complexes vary in activities and operations, the staff 

believes that their policies, procedures, and plans generally should be tailored based 

on the nature and scope of their business. Additionally, because fund complexes 

also outsource critical functions to third parties, the staff believes that they should 

consider conducting thorough initial and ongoing due diligence of those third 

parties, including due diligence of their service providers’ business continuity and 

disaster recovery plans.

Notable Practices for Fund Complexes

The Division recently conducted outreach to a number of fund complexes and their 

advisers regarding business continuity planning generally. The staff recognized 

many similarities among fund complexes, including that most funds rely on fund 

complex or enterprise-wide business continuity and disaster recovery plans that 

incorporate, among other things, the critical functions performed on behalf of funds. 
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In the staff’s view, critical fund service providers likely would include, but would not 

be limited to, each named service provider under rule 38a-1 (i.e., each investment 

adviser, principal underwriter, administrator, and transfer agent), as well as each 

custodian and pricing agent.17

Although the types of funds and fund complex business models may vary 

significantly, they generally share certain fundamental operational risks, including 

their ability to continue operations and service investors during business disruptions, 

regardless of the cause. The staff observed the following notable practices in recent 

discussions with fund complexes:

• Plans typically cover the facilities, technology/systems, employees, and activities 

conducted by the adviser and any affiliated entities, as well as dependencies on 

critical services provided by other third-party service providers. 

• A broad cross-section of employees from key functional areas are involved in 

BCP programs at the fund complex typically including, but not limited to, senior 

management (including officers of the fund), technology, information security, 

operations, human resources, communications, legal, compliance, and risk 

management to assist in efforts to ensure continuity and resiliency when events 

occur. 

• The fund’s Chief Compliance Officer (“CCO”) and/or the CCO of other entities in 

the fund complex typically participate in the fund complex’s third-party service 

provider oversight process as conducted by key personnel. Service provider 

oversight programs generally incorporate both initial and ongoing due diligence 

processes, including review of applicable business continuity and disaster recovery 

plans for critical providers. The fund complex typically seeks a combination of 

information to conduct its oversight, including, but not limited to, service provider 

presentations, on-site visits, questionnaires, certifications, independent control 

reports,18 and summaries of programs and testing, where appropriate, including 

with respect to BCPs.19

• Although practices vary, BCP presentations are typically provided to fund boards of 

directors, with CCO participation, on an annual basis and are given by the adviser 

and/or other critical service providers. These presentations may be provided 

separately, as part of periodic presentations related to contractual arrangements 

(including as part of the annual section 15(c) process),20 or as part of the CCO’s 

annual update to the board.21
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• For many fund complexes, some form of BCP testing for their plan occurs at least 

annually, and the results of the fund complex’s tests may be shared in updates to 

fund boards. 

• Business continuity outages, including those incurred by the fund complex or a 

critical third-party service provider, are monitored by the CCO and other pertinent 

staff and reported to the fund board as warranted.22

Additional Considerations Regarding Critical Service Providers

As described above, advisers of fund complexes, CCOs, and the fund board play a 

key role in the selection and ongoing oversight of critical fund service providers. 

Key business functions and related activities may be performed by an affiliate of 

the fund complex, a third-party service provider, or some combination thereof. In 

the staff’s view, a fund complex’s BCP should contemplate such arrangements, and 

consider the following lessons learned from past business continuity events and 

our outreach efforts when formulating fund complex BCPs as they relate to critical 

service providers.

•	 Back-Up Processes and Contingency Plans. The staff believes that fund 

complexes should consider examining critical service providers’ backup 

processes and redundancies, the robustness of the provider’s contingency 

plans, including reliance on other critical service providers, and how these 

providers intend to maintain operations during a significant business 

disruption. Fund complexes generally should understand how their own BCP 

addresses the risk that a critical service provider could suffer a significant 

business disruption and how the provider and the fund complex might 

respond under certain scenarios.23

•	 Monitoring Incidents and Communications Protocols. The staff believes 

that fund complexes should consider how they can best monitor whether 

a critical service provider has experienced a significant disruption (such as 

a cybersecurity breach24 or other continuity event) that could impair the 

service provider’s ability to provide uninterrupted services, the potential 

impacts such events may have on fund operations and investors, and the 

communication protocols and steps that may be necessary for the fund 

complex to successfully navigate such events. Such protocols might include:

– Policies and procedures for internal communications across the fund 

complex (e.g., involving senior management, legal, compliance, risk 

management, technology, information security, operations, human 

resources, and communications staff), as well as with fund boards. 
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– External communications plans that address ongoing discussions 

with the affected service provider, as well as other providers as 

warranted, and intermediaries, investors, regulators, and the press, 

as appropriate. 

– Maintaining updated and accessible contact information for 

essential communications with various constituents during an event.

– Providing timely communications that report progress and next 

steps, which may include posting updates to websites or portals to 

facilitate accessibility and broad dissemination of information. 

•	 Understanding the Interrelationship of Critical Service Provider BCPs.

The staff believes that fund complexes should consider how the BCPs of a 

fund’s critical service providers relate to each other to better ensure that 

funds can continue operations and/or promptly resume operations during a 

significant business disruption. For example, if the fund complex relies on a 

particular third-party service provider to calculate its NAV on a daily basis, 

has the fund complex discussed with the service provider any redundancies 

and backup plans the service provider has in the event it experiences a 

significant business disruption? Additionally, does the fund complex also 

have backup procedures that address the steps that would need to be taken 

to successfully navigate through the service provider disruption in order to 

mitigate potential risks to impacted funds and investors? 

•	 Contemplating Various Scenarios. The staff believes that fund complexes 

should consider how a critical service provider disruption could impact 

fund operations and investors, and generally have a plan for managing the 

response to potential disruptions under various scenarios, whether such 

disruptions occur internally or at a critical third-party service provider. 

In the staff’s view, to assist fund boards in providing appropriate oversight, boards 

generally should discuss with the fund’s adviser and other critical (affiliated and/or 

third-party) service providers the steps being taken to mitigate the risks associated 

with business disruptions and the robustness of their business continuity planning, 

including how the fund complex’s own BCP addresses the risk that a critical thirdparty service provider could suffer a business disruption. 25
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Conclusion

The staff believes that funds will be better prepared to deal with business continuity 

events, if and when they occur, if fund complexes consider the robustness of their 

BCPs as well as those of their critical third-party service providers. The staff also 

believes that fund complexes’ preparedness likely would be enhanced if they 

consider their service providers’ interrelationships to one another and how the 

fund complex will respond to significant business disruptions that may impact their 

internal operations and/or a critical third-party service provider of the fund. The 

staff recognizes that it is not possible for a fund or fund complex to anticipate or 

prevent every business continuity event. However, the staff believes appropriate 

planning includes consideration of these issues and various scenarios in advance of 

a significant business disruption. We believe such planning will assist funds and fund 

complexes in mitigating the impact of significant business disruptions on operations 

and in servicing investors, as well as in complying with the federal securities laws 

throughout business continuity events.

Endnotes

1 See 17 CFR 270.38a-1(a)(1).

2 For purposes of this guidance update, we use the term “fund complex” to mean 

funds, their primary investment adviser, and other fund service providers that are 

affiliated with the funds or their primary investment adviser. See section 2(a)(3) of 

the Investment Company Act (defining “affiliated person”). 

3 We recognize that some funds do not have a traditional “sponsor” and instead use 

a turnkey service provider or third-party administrator to conduct all or most of 

the activities of running the fund. Like with other critical service providers, the staff 

believes that such funds should consider the BCP of their turnkey service provider 

or third-party administrator as it affects the fund. See Additional Considerations 

Regarding Critical Service Providers in this guidance update.

4 See, e.g., Summary of “Lessons Learned” from Events of September 11 and 

Implications for Business Continuity, Discussion Note Prepared by Staffs of the 

Federal Reserve, the New York State Banking Department, the Office of the 

Comptroller of the Currency, and the SEC, for discussion at a meeting on February 
IM GUIDANCE UPDATE 8

26, 2002 at the Federal Reserve Bank of New York (Feb. 13, 2002), available at

https://www.sec.gov/divisions/marketreg/lessonslearned.htm; Interagency Paper on 

the Sound Practices to Strengthen the Resilience of the Financial System, Securities 

Exchange Act Rel. No. 47638 (April 7, 2003) [68 FR 17809 (Apr. 11, 2003)] (setting 

forth business continuity objectives for all financial firms and the U.S. financial 

system as a whole); Policy Statement: Business Continuity Planning for Trading 

Markets, Securities Exchange Act Rel. No. 48545 (Sept. 29, 2003) [68 FR 56656 

(Oct. 1, 2003)]. 

5 See supra note 4; see also Comment Letter of Investment Company Institute on the 

Financial Stability Oversight Council’s (“FSOC”) Notice Seeking Comment on Asset 

Management Products and Activities (Mar. 25, 2015) (“ICI FSOC Comment Letter”) 

at 68 (“Over the past several decades, the fund industry has confronted and 

worked through a variety of emergencies .... In addition, since September 11, 2001, 

the nature and scope of business continuance has changed significantly, making 

fund complexes and their critical service providers more resilient to unexpected 

business interruptions.”). 

6 See Comment Letter of BlackRock, Inc. on the FSOC Notice Seeking Comment 

on Asset Management Products and Activities (Mar. 25, 2015) at 10 (“In the 

normal course of business, asset managers implement measures to mitigate the 

impact of potentially disruptive events through operational risk management 

programs, including maintaining business continuity plans ....”); Comment Letter 

of The Capital Group Companies to the FSOC Notice Seeking Comment on Asset 

Management Products and Activities (Mar. 25, 2015) at 11 (“Regulatory compliance 

and operational risk management are well-developed areas within [the asset 

management] industry .... Consequently, asset managers invest significant resources 

and employ various tools to avoid operational issues that could adversely affect 

their clients or the assets they manage.”); ICI FSOC Comment Letter, supra note 

5 at 69 (“[F]unds and key service providers to the industry have robust plans 

and strategies in place to facilitate the continuation or resumption of business 

operations in the event of an emergency....”).

7 See, e.g., supra note 4; see also FSOC Notice Seeking Comment on Asset 

Management Products and Activities, available at http://www.treasury.gov/

initiatives/fsoc/rulemaking/Documents/Notice%20Seeking%20Comment%20

on%20Asset%20Management%20Products%20and%20Activities.pdf, [79 FR 77488 

(Dec. 24, 2014)] (requesting public comment on, among other things, operational 

risks and transition planning as it relates to the asset management industry).
IM GUIDANCE UPDATE 9

8 See, e.g., infra notes 9 and 12; see also FINRA rule 4370 (requiring broker-dealers 

to have BCPs that address certain required elements); SEC Approves NASD 

and NYSE Business Continuity Rules (Apr. 2004), available at https://www.sec.

gov/news/press/2004-53.htm. More recently, in 2014, the Commission adopted 

Regulation Systems Compliance and Integrity, or Regulation SCI, which, among 

other things, requires certain entities to establish, maintain, and enforce written 

policies and procedures, including business continuity and disaster recovery plans 

that include maintaining backup and recovery capabilities sufficiently resilient 

and geographically diverse and that are reasonably designed to achieve next 

business day resumption of trading and two-hour resumption of critical SCI 

systems following a wide-scale disruption. See Regulation Systems Compliance 

and Integrity, Securities Exchange Act Rel. No. 73639 (Nov. 19, 2014) [79 FR 72251 

(Dec. 5, 2014)]; 17 CFR 242.1001(a)(2)(v). 

9 See Compliance Programs of Investment Companies and Investment Advisers, 

Advisers Act Rel. No. 2204 (Dec. 17, 2003) [68 FR 74714 (Dec. 24, 2003)] 

(“Compliance Program Adopting Release”). In 2003, the Commission also adopted 

rule 206(4)-7 under the Advisers Act, which makes it unlawful for a registered 

investment adviser to provide investment advice unless the adviser has adopted 

and implemented written policies and procedures that are reasonably designed 

to prevent violation by the adviser and its supervised persons of the Advisers 

Act and the rules thereunder. See 17 CFR 275.206(4)-7(a). In addition, today the 

Commission proposed a new rule under the Advisers Act that would require SECregistered investment advisers to adopt and implement business continuity and 

transition plans reasonably designed to address operational and other risks related 

to a significant disruption in the investment adviser’s operations and that also 

address certain components. See Adviser Business Continuity and Transition Plans, 

Advisers Act Rel. No. 4439 (June 28, 2016).

10 Rule 38a-1 also requires a fund’s compliance policies and procedures to provide 

for the oversight of compliance by the fund’s advisers, principal underwriters, 

administrators, and transfer agents (collectively, “named service providers”), and 

that the fund’s board of directors approve, and review annually, the compliance 

policies and procedures of the fund and each of its named service providers. See 17 

CFR 270.38a-1(a)(1)-(3). 

11 In the Compliance Program Adopting Release, the Commission stated that it 

expected that an adviser’s policies and procedures, at a minimum, should address 

(among other things) BCPs to the extent that they are relevant to that adviser. In 
IM GUIDANCE UPDATE 1 0

the context of the expected elements of a fund’s compliance program, the release 

states that “[f]unds’ or their advisers’ policies and procedures should address the 

issues ... identified for investment advisers....” See Compliance Program Adopting 

Release, supra note 9.

12 See Compliance Alert, June 2007, available at https://www.sec.gov/about/offices/

ocie/complialert.htm; National Exam Program Risk Alert, SEC Examinations of 

Business Continuity Plans of Certain Advisers Following Operational Disruptions 

Caused by Weather-Related Events Last Year (Aug. 27, 2013), available at https://

www.sec.gov/about/offices/ocie/business-continuity-plans-risk-alert.pdf. The 2012 

examination was part of a joint review by the Commission’s Office of Compliance 

Inspections and Examinations, the Financial Industry Regulatory Authority, and 

the Commodity Futures Trading Commission of relevant firms’ business continuity 

and disaster recovery planning in the wake of Hurricane Sandy. Together, these 

entities also issued a joint statement setting forth best practices and lessons 

learned as a result of their review. See Joint Review of Business Continuity and 

Disaster Recovery of Firms by the Commission’s National Examination Program, 

the Commodity Futures Trading Commission’s Division of Swap Dealers and 

Intermediary Oversight and the Financial Industry Regulatory Authority (Aug. 

16, 2013), available at http://www.sec.gov/about/offices/ocie/jointobservationsbcps08072013.pdf.

13 In late August 2015, Bank of New York Mellon (“BNY Mellon”), a service provider 

that provides custodial and administrative services to mutual funds, closedend funds, and exchange-traded funds, experienced a breakdown in one of its 

third-party systems (SunGard’s InvestOne) used to calculate numerous client 

funds’ NAVs. See, e.g., Stephen Foley, BNY Mellon Close to Resolving Software 

Glitch, Financial Times (Aug. 31, 2015), available at http://www.ft.com/intl/

cms/s/0/47d5860a-4f2b-11e5-b029-b9d50a74fd14.html; Jessica Toonkel & Tim 

McLaughlin, BNY Mellon Pricing Glitch Affects Billions of Dollars of Funds, Reuters 

(Aug. 26, 2015), available at http://www.reuters.com/article/bnymellon-fundsnav-idUSL1N1111QY20150826; Barrington Partners White Paper, An Extraordinary 

Week: Shared Experiences from Inside the Fund Accounting System Failure of 

2015 (Nov. 2015), available at http://www.mfdf.org/images/uploads/blog_files/

SharedExperiencefromFASystemFailure2015.pdf; Transcript of the BNY Mellon 

Teleconference Hosted by Gerald Hassell on the Sungard Issue, available at https://

www.bnymellon.com/_global-assets/pdf/events/transcript-of-bny-mellonteleconference-on-sungard-issue.pdf. 
IM GUIDANCE UPDATE 1 1

14 This situation resulted in certain clients pricing their shares using stale or manually 

calculated NAVs and certain ETFs using stale baskets. Once the automated system 

was restored, ETF baskets were updated and certain funds had to review the NAVs 

used while the automated system was down and make any necessary corrections. 

See supra note 13.

15 See Remarks to the Investment Company Institute’s 2016 Mutual Funds and 

Investment Management Conference, David W. Grim (Mar. 14, 2016), available at

http://www.sec.gov/news/speech/david-grim-remarks-to-ici-2016-mutual-fundsand-invest-mgmt-conf.html (“[L]ast August, a computer malfunction at one 

financial institution prevented it from calculating accurate net asset values for 

hundreds of mutual funds and exchange traded funds. The situation could have 

been far worse had the outage persisted.”). 

16 See id.

17 See, e.g., ICI FSOC Comment Letter, supra note 5 at 59-61 (discussing key service 

providers for funds); see also Compliance Program Rule Adopting Release, supra

note 9 at n.28 (noting that limiting the service providers named in rule 38a-1 did 

not lessen a fund’s obligation to consider compliance as part of its decision to 

employ other entities, such as pricing services, auditors, and custodians). The staff 

recognizes that not all fund service providers provide critical services to a fund. 

In determining whether a service provider is critical, fund complexes may wish 

to consider the day-to-day operational reliance on the service provider and the 

existence of backup processes or multiple providers.

18 We understand that many fund complexes review Service Organization Control 

(“SOC”) reports, such as SSAE 16 reports that are prepared by an independent 

public accountant in accordance with the American Institute of CPAs’ Auditing 

Standards Boards’ Statement on Standards for Attestation Engagements No. 16, 

Reporting on Controls at a Service Organization. These reports provide assurances 

that the service provider has established a system of internal controls, that the 

internal controls are suitably designed to achieve specified objectives, and that 

the internal controls are operating effectively. See http://www.aicpa.org/Research/

Standards/AuditAttest/DownloadableDocuments/AT-00801.pdf.
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19 Service provider oversight programs also may include the review of a service 

provider’s financial condition and resources, insurance arrangements, and any 

indemnification provisions covering the service provider and its activities. See, e.g., 

Board Oversight of Certain Service Providers, Independent Directors Council, Task 

Force Report (June 2007) (“IDC Report”) at 4-5, available at https://www.idc.org/

pdf/21229.pdf. 

20 Section 15(c) of the Investment Company Act requires fund boards to approve 

and renew a fund’s investment advisory agreements and principal underwriting 

agreements. We understand that fund boards may consider an adviser’s or principal 

underwriter’s BCP in connection with its annual section 15(c) renewal process. 

21 See supra note 9 and 10, and accompanying text (discussing rule 38a-1 under the 

Investment Company Act). 

22 Such reports may include, among other things, periodic updates on progress, 

resumption, recovery, and remediation efforts during and after such events.

23 See, e.g., Comment Letter of Securities Industry and Financial Markets Association 

(Asset Management Group) and Investment Advisers Association to the FSOC 

Notice Seeking Comment on Asset Management Products and Activities (Mar. 25, 

2015) at 138 (“Typical business-continuity planning and disaster relief programs 

articulate the importance of back-ups and explicitly lay out contingency plans 

around service providers.”); The Fund Director in 2016: Keynote Address at the 

Mutual Fund Directors Forum 2016 Policy Conference, Chair Mary Jo White (Mar. 

29, 2016), available at https://www.sec.gov/news/speech/chair-white-mutual-funddirectors-forum-3-29-16.html (discussing back-up plans and redundancies in the 

context of service providers). 

24 Our staff recently addressed the importance of cybersecurity for funds and 

investment advisers. See Cybersecurity Guidance, IM Guidance Update (Apr. 2015), 

available at http://www.sec.gov/investment/im-guidance-2015-02.pdf. 

25 Fund boards oversee the activities of their funds, including the hiring and continued 

retention of critical service providers, but they are not involved in the day-to-day 

management and business activities conducted by the fund complex. Rather, they 

rely on the fund’s adviser and other service providers to perform necessary day-today functions on behalf of the fund. See Compliance Program Adopting Release, 

supra note 9 at 29 (“Most of the operations of funds are carried out by service 

providers....”); IDC Report, supra note 19 at 1 (“Service providers play a significant 

role in the day-to-day operations of a fund....”). 
IM GUIDANCE UPDATE 1 3

IM Guidance Updates are recurring publications that summarize the staff’s views 

regarding various requirements of the federal securities laws. The Division generally 

issues IM Guidance Updates as a result of emerging asset management industry trends, 

discussions with industry participants, reviews of registrant disclosures, and no-action 

and interpretive requests.

The statements in this IM Guidance Update represent the views of the Division of 

Investment Management. This guidance is not a rule, regulation or statement of the 

Securities and Exchange Commission. Further, the Commission has neither approved 

nor disapproved its content. Future changes in rules, regulations, and/or staff no-action 

and interpretive positions may supersede some or all of the guidance in a particular 

IM Guidance Update.

The mission of the Securities and Exchange Commission is to protect investors; maintain fair, 

orderly, and efficient markets; and facilitate capital formation.

If you have any questions about this IM Guidance Update, please contact:

Andrea Ottomanelli Magovern

Kathleen Joaquin 

Investment Company Rulemaking Office 

Phone: 202.551.6792