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Investment Company Cross Trading
Plain English Summary
The Securities and Exchange Commission (SEC) is planning to change rules that allow registered investment companies to trade securities with certain related companies, known as cross trades. These changes aim to include more types of securities for cross trading, update the rules to better protect investors, and require companies to report their trading activities more clearly. Agents should stay informed about these changes and prepare for new reporting requirements.
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The Securities and Exchange Commission (the "Commission") is proposing to amend the rule under the Investment Company Act of 1940 (the "Investment Company Act") that permits securities transactions between a registered investment company and certain affiliates (referred to as "cross trades"), subject to conditions. The proposed amendments are designed to expand the scope of securities that are eligible for cross trading, modernize the rule's conditions, and enhance investor protection. The Commission also proposes to require aggregated reporting of trading activity and cross trades in Form N- PORT and Form N-MFP.