SEC Proposes Expansion Of Fund Merger Exemptive Rule
The SEC has proposed amendments to Rule 17a-8 (the "Rule") under the Investment Company Act of 1940 (the "1940 Act"). Currently, Rule 17a-8 provides an exemption from the 1940 Act’s prohibition on transactions between a fund and its affiliates to allow a merger between affiliated funds if the only basis for affiliation is that the funds have a common investment adviser, common directors and/or common officers. The amendments would make the Rule available for mergers in which participating funds are affiliated for other reasons, e.g., because of significant common shareholders. The amendments would also permit a merger between a fund and an affiliated bank common trust fund (a "Commo n Trust Fund") or collective trust fund (a "Collective Trust Fund").
