Withdrawn 2001 Names Rule FAQs

Jan. 8, 2025

Rule 35d-1 under the Investment Company Act of 1940 (the “names rule”) addresses certain broad categories of investment company names that are likely to mislead investors about an investment company’s investments and risks. The names rule was originally adopted by the Commission in 2001. In 2001, staff of the Division of Investment Management published responses to certain Frequently Asked Questions related to the adoption of the names rule (the “2001 FAQs”).

In January 2025, the staff of the Division of Investment Management published responses to certain Frequently Asked Questions related to the Commission’s 2023 adoption of amendments to rule 35d-1 (the “2025 FAQs”). In connection with these 2025 FAQs, staff has determined to withdraw certain of the 2001 FAQs (for example, because the FAQ addresses circumstances particular to the 2001 adoption of the names rule, or because the Commission’s 2023 adopting release addresses the topic the 2001 FAQ covers). The staff is retaining the balance of the 2001 FAQs, with modifications, as set forth in the 2025 FAQs.

The following chart shows the 2001 FAQs that staff has determined to withdraw.

Withdrawn 2001 Names Rule FAQs

2001 FAQ # 2001 FAQ topic 2001 FAQ question text
2 Adoption of 80% Investment Policy May a fund that changes its investment policy from 65% to 80% in order to come into compliance with rule 35d-1 disclose that change in a post-effective amendment filed pursuant to rule 485(b) under the Securities Act?
5 Tax-Exempt Funds The SEC recently adopted rules that require a mutual fund to include standardized after-tax returns in advertisements and sales literature that include any quotation of performance and that represent or imply that the fund is managed to limit or control the effect of taxes on fund performance. Advertisements and sales literature for a fund that is eligible to use a name suggesting that its distributions are exempt from federal income tax or both federal and state income tax under rule 35d-1 are not, however, required to include standardized after-tax returns, unless they voluntarily choose to include after-tax performance information. All fund advertisements and sales literature are required to comply with the new after-tax return rules no later than December 1, 2001, but compliance with rule 35d-1 is not required until July 31, 2002. Prior to July 31, 2002, must a fund that relies on the exception for tax-exempt funds from the requirement to report standardized after-tax returns in advertising and sales literature meet the requirements of rule 35d-1(a)(4)?
6 Specific Terms Commonly Used in Fund Names Does rule 35d-1 apply to funds that use the terms “small-cap,” “mid-cap,” and “large-cap?”
10 Specific Terms Commonly Used in Fund Names How does rule 35d-1 apply to a fund with a name that includes the term “global” or “international,” followed by a term that suggests a particular type of investment, such as “fixed income?”
11 Specific Terms Commonly Used in Fund Names Would rule 35d-1 require a fund that uses a term such as “intermediate term bond” in its name to invest at least 80% of its assets in intermediate term bonds?
12 Specific Terms Commonly Used in Fund Names Are there any guidelines for a bond fund’s use of a name that suggests that its portfolio has a specified duration, e.g., “short-duration bond fund?”
14 Notice to Shareholders of Change in Investment Policy For a fund that has adopted a policy to provide its shareholders with at least 60 days’ notice prior to changing its 80% investment policy, what should the notice include?
15 Compliance Date When do new registrants have to comply with the requirements of rule 35d-1?

Last Reviewed or Updated: Jan. 8, 2025