Ropes & Gray Registered Funds Specialty Group Co-Head Quoted in Barron’s on Fund Name Regulations
A March 6 article in Barron’s titled “SEC Cracks Down On Fund Names” discusses the SEC’s recent requests for comments on potential changes to its Names Rule, the framework for registered investment companies such as mutual funds and exchange-traded funds. Insights from asset management partner and registered funds specialty group co-head Thomas Hiller are included in the piece.
The article states that the Rules “could use a refresh” since the current regulations were adopted in 2001, using the example of ESG asking if a fund name sufficiently reflects this is a strategy or type of investment? Fund companies want to call it a strategy, exempting them from asset tests, but the SEC has pushed back, arguing that funds using ESG or similar words should abide by the 80% rule, says Tom in the piece. “The SEC has pushed funds to adopt name policies even if it’s not clear where the rule applies,” he says. “ESG is the big issue of the day.”