SEC Adopts Amendments to Redemption Fee Rule and Extends Compliance Dates
Date: September 27, 2006
On September 27, 2006, the Securities and Exchange Commission adopted amendments to Rule 22c-2 under the Investment Company Act of 1940. The amendments:
- Limit the types of intermediaries with which funds must enter into written shareholder information agreements,
- Address the rule’s applicability to situations where there are “chains of intermediaries;” and
- Clarify the consequences of a fund’s failure to execute a shareholder information agreement with an intermediary.
When the Commission adopted Rule 22c-2 in March 2005, it established a compliance date of October 16, 2006. The Commission has now extended the compliance date for portions of the rule. The revised compliance dates are as follows:
October 16, 2006 - Date by which a fund’s board must consider the adoption of a redemption fee.
April 16, 2007 - Date by which a fund must enter into shareholder information agreements with intermediaries.
October 16, 2007 - Date by which a fund must be able to request and promptly receive shareholder identity and transaction information under its shareholder information agreements.
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