40 Act Fund Launch Compliance Considerations
Vigilant Insights
Introduction
Launching a Registered Investment Company (RIC) involves a range of regulatory, operational, and compliance considerations that should be addressed before the Fund begins offering shares.
Establishing the compliance framework early can help ensure the Fund and its Service Providers understand their respective responsibilities from launch.
Key Compliance Considerations
- Registration & Filings: Coordinate the Fund’s registration statement and required SEC filings, including applicable Forms N-1A and N-1, as appropriate.
- Compliance Program: Establish the Fund’s written compliance policies and procedures and address the requirements of Rule 38a-1.
- Marketing & Advertising: Review sales literature, advertisements, website content, and other communications for compliance with applicable requirements.
- Board Oversight: Provide the Board with the information and materials necessary to fulfill its oversight responsibilities.
- Service Provider Oversight: Establish processes for overseeing key Service Providers, including the Investment Adviser, Administrator, Custodian, Transfer Agent, and other Vendors.
- Investment Restrictions: Ensure investment activities are structured and monitored in accordance with the Fund’s stated investment strategy, governing documents, and applicable regulatory requirements.
- Code of Ethics: Establish and implement appropriate Code of Ethics procedures and personal trading controls.
- Valuation & NAV: Establish appropriate valuation and net asset value calculation policies and procedures.
- Liquidity & Risk Management: Address applicable liquidity and risk management requirements based on the Fund’s structure and investment strategy.
How Vigilant Can Help
Vigilant can support both the Fund and its Adviser throughout the launch process and as the Fund moves into on-going operations. Areas of support can include:
- Pre-Fund Launch Services
- Help establish the Fund’s compliance foundation before launch, including the Compliance Manual, Code of Ethics, compliance policies and procedures, and other launch-related compliance materials.
- SEC Registration Services
- Provide support throughout the SEC registration process, including preparation and review of applicable registration documents and regulatory filings.
- Fund CCO Services
- Serve as the Fund’s Chief Compliance Officer and provide on-going compliance oversight, including Rule 38a-1 requirements, compliance testing, reporting, and support for Fund Board meetings.
- Funds Types Vigilant provides CCO Services to:
- ETFs (i.e., Thematic, 351 Exchanges, Active, Passive, Derivatives focused, etc.)
- Closed End Funds (Interval Funds, Tender Offer Funds, Publicly Listed, CITs)
- BDCs (Publicly Traded, Non-Traded, Privately Offered)
- Mutual Funds (i.e., Fixed Income, Value, Equity, etc.)
- Principal Underwriter Services
- Serve as the Fund’s Statutory Distributor / Principal Underwriter and support the Fund’s distribution framework, including Broker-Dealer and wholesaler agreements, distribution arrangements, marketing material review, Rule 12b-1 administration services, and dealer due diligence and ongoing oversight.
- Adviser CCO Services
- Serving as Chief Compliance Officer for the Investment Adviser on the ADV, including compliance program development and oversight, Investment Adviser compliance and regulatory requirements, risk assessments, compliance calendar management, regulatory filings, Code of Ethics and personal trading oversight, compliance training, marketing and advertising review, and on-going compliance monitoring and testing. Vigilant can provide either a fully outsourced CCO or targeted support to an existing in-house CCO.
- Registered Representative Services
- Support the Fund’s Wholesalers and Registered Representatives, including registration and licensing, compliance training, continuing education, review of Fund-related sales and marketing materials, and ongoing supervision and compliance support.