SEC Reviews Rule to Skip Annual Meetings for New Funds
Published Date: 9/5/2025
Notice
Summary
The Cboe BZX Exchange wants to change the rules so that certain investment companies listed on or after May 20, 2025, don’t have to hold annual shareholder meetings. This affects closed-end management investment companies and could save them time and money. The SEC is now deciding whether to approve this change by early September 2025.
Analyzed Economic Effects
3 provisions identified: 1 benefits, 1 costs, 1 mixed.
CEFs Listed on/after May 20, 2025 Exempted
If you invest in or run a closed-end fund (CEF), the Exchange proposed exempting any CEF listed on the Cboe BZX Exchange as of or after May 20, 2025 from the Exchange rule that requires annual shareholder meetings (the rule currently requires a meeting no later than one year after the fund's fiscal year-end). The Securities and Exchange Commission began proceedings in September 2025 to decide whether to approve or disapprove that proposed change.
Listing Cost and Capital Formation Relief
The Exchange says removing the annual meeting requirement for CEFs listed on or after May 20, 2025 would reduce operational costs for those funds and make it easier to bring new CEFs to the public market, which could encourage more CEF listings and IPOs.
Possible Loss of Shareholder Meeting Rights
If you already own shares of a closed-end fund, the proposal could allow some existing shareholders to lose the right to an annual meeting because a fund listed elsewhere before May 20, 2025 could merge or reorganize into a new CEF that lists on BZX and is exempt. The SEC identified this as a potential investor-protection concern in its September 2025 order instituting proceedings.
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