SEC Guards Fish Funds with 14 Hours of Paperwork
Published Date: 8/24/2026
Notice
Summary
The SEC is asking to keep Rule 17f-1, which helps protect investment funds by making sure their assets are safely held by trusted securities exchange members. This rule affects a few funds that must get board approval and have their assets checked by independent auditors each year. It takes about 14 hours total yearly for these funds to follow the rule, with no big changes or extra costs expected.
Analyzed Economic Effects
2 provisions identified: 0 benefits, 2 costs, 0 mixed.
Estimated Time and Cost Burden
The Commission estimates each fund that relies on Rule 17f-1 spends about 3.5 internal hours annually (0.5 hours for the board and 3 hours for the controller) and incurs outside costs of about $1,548 per year for a lawyer and $11,550 per year for an independent public accountant, for a total external cost of approximately $13,098 per fund. The staff estimates about 4 funds rely on the rule annually, for an estimated total annualized external cost burden of $52,392 and a total internal hour burden of about 14 hours.
Custody Contracts and Audit Rule
If a registered management investment company (a fund) puts its assets in custody with a national securities exchange member, the fund must have a written custodial contract that the board initially ratifies and then approves annually. The rule also requires an independent public accountant to examine the fund's custodial assets at least three times during the fund's fiscal year, and the contract plus each examination certificate must be transmitted to the Securities and Exchange Commission.
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Key Dates
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