Published on Sep 1st, 2022 |

Who Does This Rule Apply To?

The New SEC Rule 2a-5 of the Investment Company Act of 1940 applies to all Registered Investment Companies & Business Development Companies (“Funds”) regardless of classification or investment objectives.

What Is Required Of Funds?

The SEC Rule 2a-5 was made effective by the SEC on March 8, 2021, and has a compliance date of September 8, 2022.

The Rule requires the following functions of Funds:

  • Periodical assessment & management of material risks associated with the determination of the fund’s fair value
  • Establishment, application, and maintenance of fair value methodologies
  • Test fair value methodologies for accuracy & appropriateness
  • Oversight of pricing services

These functions can be carried out by either the Board of the Fund or a valuation designee, subject to the Board’s oversight.

Vigilant’s Final Conclusion

With the Compliance Date coming into effect for the New Rule, Vigilant provides 2a-5 Compliance Services where we:

  • Provide/Review Initial and Regular Risk Assessments;
  • Establish/Assist with Fair Value Methodologies;
  • Evaluate Pricing;
  • Periodic Reporting to the Board; and
  • Annual Assessment of the Adequacy and the Effectiveness of the Evaluation Designees Process or Fair Value Determination Process.

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