The SEC request for comment on the effectiveness of the framework governing the names of registered investment companies and business development companies was published in the Federal Register. Comments must be received by May 5, 2020.
As previously covered, Investment Company Act Rule 35d-1 (the "Names Rule") prohibits registered investment companies from using a name that is likely to mislead investors. Rule 35d-1 provides, in part, that when an investment company refers to a certain type of asset (e.g., equities) in its name, at least 80 percent of the investment company must be invested in that type of asset. The SEC stated that it is assessing whether the existing rule is effective in prohibiting the use of deceptive names of funds, as well as if alternative frameworks should be considered.