April 2007 Archives
SEC Provides Class Relief for Fixed Income Exchange-Traded Funds
PDF version On April 9, the SEC’s Division of Market Regulation issued class relief from certain rules and regulations under the Securities Exchange Act of 1934 (Exchange Act) for exchange-traded funds (ETFs) that invest in fixed income securities (Fixed Income ETFs). The class relief is similar to relief that was recently provided to ETFs investing in equity securities. Specifically, the class relief provides exemptive and no-action relief, as well as interpretive advice, with respect to Rules 10a-1 and 10b-17 under the Exchange Act, Rules 101 and 102 of Regulation M, and Rule 200(g) of Regulation SHO for Fixed Income ETFs that meet certain conditions.
Implications of the D.C. Circuit’s Decision Vacating Rule 202(a)(11)-1
As widely reported, on March 30, 2007, a divided panel of the U.S. Court of Appeals for the D.C. Circuit vacated Rule 202(a)(11)-1 under the Investment Advisers Act of 1940 (Advisers Act). The Financial Planning Association (FPA) had challenged the rule, arguing that the SEC had overstepped its authority in exempting brokerdealers from the definition of “investment adviser” when offering fee-based brokerage accounts. The court vacated the rule in its entirety, including provisions clarifying when a broker-dealer would and would not be deemed to be an investment adviser, even though these other provisions of the rule were not challenged by the FPA. [1]