2026-13495NoticeWallet

SEC Wants to Keep Its Dictionary Words Updated

Published Date: 7/6/2026

Notice

Summary

The SEC is asking for comments to extend a rule that defines important terms used in regulating investment funds. This rule helps fund boards and advisers understand key words, especially about when they can use special exemptions. It mainly affects investment companies and aims to keep things clear without adding new costs or deadlines.

Analyzed Economic Effects

3 provisions identified: 1 benefits, 2 costs, 0 mixed.

Rule 0-1 Defines Fund Terms

If you operate an investment company (a fund), Rule 0-1 provides the official definitions the SEC uses for rules under the Investment Company Act, including the term "independent legal counsel." These definitions serve as conditions for relying on ten exemptive rules under the Act, so meeting the definitions is required to obtain or retain those exemptions.

Board Duties on Counsel Independence

If your board's counsel represented the fund's management organizations or their control persons during the past two years, a majority of the fund's independent directors must reasonably determine that those representations were sufficiently limited so they won't adversely affect the counsel's impartiality. The board must record the basis for that determination in the directors' meeting minutes, obtain an undertaking from counsel to provide and update necessary information, and re-evaluate the determination no less frequently than annually.

Estimated Recordkeeping Burden

The SEC estimates that about 920 funds would need to make the required determination under Rule 0-1 and that the recordkeeping burden is about 1 hour per respondent, for a total estimated annual internal burden of approximately 920 hours; the SEC estimates total annual external cost of $0.

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Key Dates

Published Date
7/6/2026

Department and Agencies

Department
Independent Agency
Agency
Securities and Exchange Commission
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