Investment Company Governance

What this video covers

• Why Form N-1A is the exclusive registration statement for open-end funds, and the exam trap of confusing it with closed-end or unit investment trust (UIT) forms
• How the 40% independent director minimum works, what defines an "interested person" (including the 5% ownership line), and when the majority-independent requirement kicks in
• The two-thirds rule for board appointment of replacement directors, and the 60-day deadline to call a shareholder meeting if shareholder-elected directors drop below majority
• Which investment policy changes are fundamental and therefore require shareholder approval, including shifts in diversification status or core objectives
• How the Names Rule enforces an 80% asset-name match, and why this applies to descriptive characteristics like environmental, social and governance (ESG) or sustainable growth labels
• Why open-end funds are limited to bank borrowing as their only senior security, and how 300% asset coverage applies to open-end and closed-end debt while 200% applies to closed-end preferred stock
• What forward pricing means: the next computed net asset value (NAV) after order receipt, with the 4 p.m. Eastern cutoff, and why stale NAVs are never permitted
• The semiannual and annual reporting requirements, the 10-day SEC filing deadline, and why only the annual report requires audited financial statements
• Which antifraud duties apply to investment companies, including unlawful representations, fiduciary duty on advisory fees, and why larceny or embezzlement is federal crime