Schwartz Quoted on ICI Response to SEC Fund-of-Funds Draft Rule

News

Schwartz Quoted on ICI Response to SEC Fund-of-Funds Draft Rule

In The News |

Ignites

Rachael Schwartz was quoted on how the Securities and Exchange Commission’s (SEC) fund-of-funds rule proposal could present challenges to fund-of-fund arrangements.

In a comment letter to the SEC, the Investment Company Institute (ICI) said that portfolio managers could have to consider any fund-of-funds holdings as illiquid. A fund owning 25 percent of an underlying fund — the maximum allowed — could need up to 10 months to completely unwind from that holding.

Rachael noted how this restriction seems arbitrary because “one of the benefits of investing in a registered open-end fund is it’s a redeemable, liquid investment.”

Read the full article here. (Subscription required)