Funds Don’t Identify Rule 144A and Regulation S Securities as “Restricted”

Notwithstanding my technical interpretation of “restricted security” in Part One, my sampling of recent annual reports found no funds treating Rule 144A or Regulation S securities as restricted.
Continue Reading Are There Still Such Things as Restricted Securities?—Part Two

Rule 6-03(f) of Regulation S-X requires investment companies to make specific disclosures regarding any investments in “restricted securities,” defined as “securities which cannot be offered for public sale without first being registered under the Securities Act of 1933 [the “1933 Act”].” The recently enacted Fixing America’s Surface Transportation (FAST) Act expands the ability to sell unregistered securities. This poses the question of what impact the FAST Act may have on fund disclosures.

Part One explains what S-X requires; Part Two will explain what funds do and how this might change as a result of the FAST Act.
Continue Reading Are There Still Such Things as Restricted Securities? —Part One

SEC Commissioner Kara Stein gave a thoughtful speech at the Brookings Institution the other day, identifying some urgent questions regarding mutual fund regulation. I am simpatico with many of the views expressed in her speech. But I cringed when she referred to liquidity as “a foundational principle of the Investment Company Act since its inception.” Far from being part of its foundation, liquidity wasn’t even in the blueprints for the Act.
Continue Reading Liquidity: An Afterthought to the Investment Company Act