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August 14, 2020

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August 13, 2020

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August 12, 2020

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SEC Extends Relief from 1940 Act In-Person Voting Requirements

As previously reported, in March 2020, the SEC issued exemptive orders providing relief from certain provisions of the Investment Company Act of 1940 to registered funds in light of the outbreak of coronavirus disease 2019 (COVID-19). Among other things, these orders provided relief from the in-person voting requirements under Sections 15(c) and 32(a) of the 1940 Act and Rules 12b-1(b)(2) and 15a-4(b)(2)(ii) relating to the approval or renewal of advisory and underwriting agreements; the approval or renewal of distribution plans, agreements or arrangements; and the appointment of auditors. The relief was made available if: (1) reliance on the order would be necessary or appropriate due to circumstances related to the current or potential effects of COVID-19, (2) the votes cast for such matters would be cast at a meeting in which directors may participate by any means of communications that allow all directors to hear each other simultaneously during the meeting; and (3) the board, including a majority of independent directors, would ratify such actions at the next in-person meeting. The March orders provided relief for votes held from March 13, 2020 through August 15, 2020.

On June 19, 2020, the SEC, citing its monitoring of COVID-19 and its current understanding of the circumstances, issued a new order extending the previously issued relief from the 1940 Act’s in-person voting requirements for votes held through December 31, 2020. The relief remains subject to the same conditions set forth in the March orders.

A copy of the order is available here.

© 2020 Vedder PriceNational Law Review, Volume X, Number 188


About this Author

Legal, Business, John Marten, Investment Attorney, Vedder Price Law FIrm

John S. Marten, a Shareholder in the Chicago office of Vedder Price, has substantial experience representing clients in the investment management industry.

As a member of the firm’s Investment Services group, Mr. Marten counsels clients on a wide variety of matters involving the application of the federal securities laws to investment companies, investment advisers and broker-dealers. He has significant experience counseling investment company clients with respect to new products and was recently involved in the creation of two mutual funds...

(312) 609 7753
Nathaniel Segal, Investment Attorney, Vedder Price Law Firm

Nathaniel Segal is an Associate at Vedder Price and a member of the Investment Services group. He focuses his practice on investment companies and investment advisers in connection with the organization and operation of investment products and services, including traditional mutual funds, closed-end investment companies (including interval funds and listed closed-end funds), variable insurance products and registered hedge funds, as well as mutual funds utilizing complex hedging and absolute return strategies. Mr. Segal has experience in conducting transactional due diligence and drafting regulatory disclosures in connection with fund reorganizations and management acquisitions. He counsels clients on a wide variety of regulatory matters, including interpretive and no-action letter requests and SEC exemptive orders, as well as governance matters and internal compliance procedures in response to SEC examinations and inquiries.

(312) 609 7747
Jacob Tiedt, Vedder Price, investment services attorney

Jacob C. Tiedt is a Shareholder at Vedder Price and a member of the Investment Services group.

Mr. Tiedt’s practice includes the representation of registered mutual funds, closed-end funds and exchange-traded funds; private funds; investment advisers; and other financial institutions on a broad range of regulatory, governance and compliance matters. Mr. Tiedt regularly counsels clients on matters relating to SEC registration, disclosure and compliance; shareholder solicitation; NYSE, Nasdaq and FINRA regulation; corporate governance; and board administration. Mr....