Effective with reports required to be filed on or after February 6, 2013, registered investment companies (including open- and closed-end funds as well as unit investment trusts) are subject to new reporting requirements under the “Iran Threat Reduction and Syria Human Rights Act of 2012” (the “Iran Act”). The requirements are codified under Section 13(r) of the Securities Exchange Act of 1934 (the “1934 Act”). Under Section 13(r), the reporting obligations are generally triggered by investing in, or engaging in business involving, Iranian petroleum resources, weapons of mass destruction, support for terrorist organizations, money laundering, facilitating Iranian banking activities, or conducting business with any person listed on the Specially Designated Nationals List of the U.S. Department of the Treasury’s Office of Foreign Assets Control. Reporting is required if the investment company or any affiliate thereof engages in any of the relevant activities. For this purpose, the applicable definition of affiliate is found at Rule 12b-2 under the Exchange Act. It includes “a person that directly, or indirectly through one or more intermediaries, controls, or is controlled by, or is under common control with, the person specified.” According to SEC staff interpretations, there is no requirement for reports to affirmatively state there are no applicable activities to disclose. Only annual and quarterly reports filed under Section 13(a) of the Exchange Act are impacted, which generally includes Forms N-CSR, N-Q and N-SAR. If 13(r) activity is disclosed, the fund must also separately file with the SEC a notice containing further details about the activity, as described in Section 13(r)(2) of the Exchange Act. The SEC is instructed under the statute to transmit the report to the President and applicable committees of the Senate and House of Representatives as well as post the information on the SEC’s website. Investment companies are advised to consult with legal counsel to discuss whether to adopt compliance policies and procedures to address the new reporting obligations under Section 13(r) and whether to include relevant questions in their director and officer questionnaires. The text of the Iran Act is available here.