Investment Company Training Series – Liquidity Rule Requirements

ACA is offering the first of two webcasts designed to review and provide insight into the SEC’s recent rule adoptions affecting funds registered under the Investment Company Act of 1940.

On October 13, 2016, the SEC adopted Rule 22e-4, liquidity risk management program, under the Investment Company Act of 1940. This rule requires each registered open-end investment company, including open-end exchange traded funds, but not including money market funds, to establish a liquidity risk management program that includes: (i) assessment, management, and periodic review of the fund’s liquidity risk; (ii) classification of the liquidity of each of the fund’s portfolio investments as well as at least monthly reviews of the fund’s liquidity classifications; (iii) determining and periodically reviewing a ‘highly liquid investment minimum’; (iv) limiting the fund’s investment in illiquid investments that are assets to no more than 15% of the fund’s net assets; and (v) for funds that engage in, or reserve the right to engage in, redemptions in kind, the establishment of policies and procedures regarding how they will engage in such redemptions in kind.

Please join ACA and TCW Group’s Jeff Engelsman, for a discussion of the new liquidity risk management program’s requirements. This webcast is designed to provide a basic understanding of compliance requirements associated with the rule and to provide practical considerations for firms beginning to explore how to comply with the rule’s requirements.

Topics covered include:

• Understanding new Rule 22e-4;
• Discussing action steps firms may consider in looking to start compliance action plans; and
• Discussing coordination with the fund board of directors/trustees, and between fund service providers – investment adviser, investment sub-adviser, and fund administrator – with respect to the rule.

Who should attend?

Compliance officers and investment professionals who want to understand the compliance responsibilities under the new liquidity risk management program rule.