Resource Guide to Navigating SEC Rule 2A-5

By: Paul Balynsky

How to Comply with SEC Rule 2a-5 and 31-a4Finalized in December 2020, the Securities and Exchange Commission’s new rule 2a-5 under the Investment Act of 1940, clarifies how fund boards of directors can satisfy their valuation obligations. The new rule explicitly permits designation of fair value determination—for assets that don’t have market quotations—to a “designee” who may engage outside third parties to assist the board in fulfilling its duties, among other provisions. The finalization of the rule also established separate rule 31a-4, which addresses the recordkeeping requirements and helps underscore the objective of the final rule to ensure the fund’s assets are properly valued.

Many fund managers and fund boards seeking additional support in navigating through the new requirements of the rule will find VRC’s new resource guide helpful. We welcome you to download your copy here, today.