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ADI 2019-07 – Review of Certain Filings Under Automatic Effectiveness Rules

April 2, 2019

Rule 485(a) provides for automatic effectiveness within prescribed time periods of certain investment company registration statement amendments. Under the rule, a new open-end fund that is organized as a new series of an existing registrant can file a post-effective amendment to an existing registration statement, and automatically become effective in as early as 75 days.[1] In addition, a post-effective amendment containing material changes to the registration statement of an existing open-end fund or unit investment trust can become effective in as early as 60 days. Staff action is not required to bring about effectiveness in either case.

On occasion, seeking automatic effectiveness can complicate efforts by the staff in the Division of Investment Management’s Disclosure Review and Accounting Office to effectively address investor protection interests. This is particularly the case where filings raise complex issues not easily resolved because of a lack of precedent. By way of example, issues requiring additional review and interaction between disclosure reviewers and registrants typically involve novel investment strategies, fee structures, and/or operational policies (e.g., significant changes to policies related to purchases and redemptions by investors).

Based on staff experience, it appears that most filings that seek automatic effectiveness under rule 485(a) do not raise these types of unique or particularly novel issues. However, the staff urges registrants planning filings under rule 485(a) that may raise material questions of first impression - or that address issues in a manner inconsistent with previous precedent - to contact the staff to discuss these issues before making a rule 485(a) filing. In addition, the staff requests that registrants respond to staff comments on a rule 485(a) filing as a general matter no later than five business days before the filing is scheduled to become effective automatically.[2] In the staff’s experience, these practices allow both the staff and registrants to completely and effectively consider the issues raised and assure a review of amendments in a manner that assists registrants in meeting their timing expectations.

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ADIs are recurring publications that summarize the staff’s views regarding various requirements of the federal securities laws.

The statements in this ADI represent the views of the Division of Investment Management. This update is not a rule, regulation or statement of the Securities and Exchange Commission. Further, the Commission has neither approved nor disapproved its content. Future changes in rules, regulations, and/or staff no-action and interpretive positions may supersede some or all of the information in a particular ADI.

We hope that this ADI will assist registrants in preparing their filings. We also welcome feedback on this ADI and on any disclosure matters. If you have any questions or feedback, please contact:

Disclosure Review and Accounting Office

Phone: 202.551.6921


[1] A sponsor of a new fund not organized as a series of an existing registrant must file a new registration statement and become effective in the normal course (typically when the staff accelerates effectiveness, after relevant legal and disclosure issues have been resolved).

[2] In cases where registrants are unable to submit responses to staff comments by that time, the staff requests that registrants file an amendment under rule 485(b)(1)(iii) delaying the effectiveness date of the filing as needed until staff comments have been resolved.

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