The U.S. Securities and Exchange Commission (SEC) approved a six-month extension of the compliance dates for “names rule.”
The names rule, adopted in September 2023, addresses fund names likely to mislead investors about a fund’s investments and risks.
According to the rule, the amendments are designed to increase investor protection by broadening the scope for certain funds to adopt a policy to invest at least 80 percent of the value of their assets in accordance with the investment focus that the fund’s name suggests. The SEC also adopted enhanced prospectus disclosure requirements for terminology used in fund names.
The new compliance date for larger fund groups is extended from Dec. 11, 2025, to June 11, 2026. The compliance date for smaller fund groups is extended from June 11, 2026, to Dec. 11, 2026.
The extension is designed to balance the investor benefit of the amended names rule framework with funds’ needs for additional time to implement the amendments properly, develop their compliance systems, and test their compliance plans.
To help funds avoid additional costs when coming into operational compliance with the names rule amendments, the SEC aligned the compliance dates with the timing of certain annual disclosure and reporting obligations that are tied to the end of a fund’s fiscal year.