SEC Extends Rule Allowing Cheap Trades Between Fund Affiliates
Published Date: 3/26/2026
Notice
Summary
The SEC is asking for comments to keep a special rule that lets investment funds trade securities with their related companies without paying extra fees. This rule helps funds save money by avoiding unnecessary commissions and makes sure prices stay fair. If you’re involved with investment companies or their affiliates, this extension keeps things running smoothly with no new costs or deadlines.
Analyzed Economic Effects
2 provisions identified: 1 benefits, 1 costs, 0 mixed.
Funds May Cross-Trade Without Commissions
If you run or are affiliated with a registered investment company, Rule 17a-7 allows purchases and sales between affiliated funds or affiliates that arise solely from a common adviser, director, or officer so the funds can avoid brokerage commissions. The rule also limits prices for those transactions to prevent unfair pricing that could harm a participating fund.
Board Records, Quarterly Reviews, Six-Year Retention
If you manage a fund relying on Rule 17a-7, the fund's board must adopt and permanently keep written procedures, make and record a determination at least quarterly that affiliated transactions complied with those procedures, and keep written records of each Rule 17a-7 transaction for not less than six years. The SEC estimates about 446 funds use the rule, about 5 hours of recordkeeping per respondent, a total annual internal burden of about 2,230 hours, and annual external costs of $1,659,120.
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Department and Agencies
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