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ARTICLE · 06 APRIL 2018

SEC Sidelines Funds Focused On Cryptocurrencies

Carlton Fields
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In a January 18 letter to two of the fund industry's leading advocacy groups, the staff of the SEC's Division of Investment Management advised fund sponsors not to initiate registration ...

United StatesFinance and Banking
Edmund J. Zaharewicz
Edmund J. Zaharewicz

In a January 18 letter to two of the fund industry's leading advocacy groups, the staff of the SEC's Division of Investment Management advised fund sponsors not to initiate registration of funds that intend to invest substantially in cryptocurrency and related products until the staff's questions, which the letter identified, are satisfactorily addressed. This applies to funds that are publicly offered as well as to registered funds that support variable insurance products. The letter identifies a host of "outstanding questions" regarding certain core requirements under Investment Company Act of 1940 (1940 Act) governing valuation, liquidity, and custody of fund assets. For example, the letter questions how funds can:

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