Developments Of Note
SEC Adopts Rule Codifying Staff Positions Regarding The Treatment Of Repurchase Agreements And Refunded Securities As An Acquisition Of The Underlying Securities
The SEC adopted a new rule ("Rule 5b-3") under the Investment Company Act of 1940, as amended (the "1940 Act"), that permits an investment company, subject to certain conditions, to treat the acquisition of a repurchase agreement as an acquisition of the underlying securities for purposes of Sections 5(b)(1) and 12(d)(3) of the 1940 Act if the obligation of the seller to repurchase the securities from the investment company is fully collateralized (See Investment Company Act Release No. 25058 (July 5, 2001)). Section 5(b)(1) of the 1940 Act, which imposes limitations on the amo unt that a diversified investment company may invest in the securities of any one issuer (other than the U.S. Government) and Section 12(d)(3) of the 1940 Act, which prohibits an investment company from acquiring an interest in
