2020 Retrospective: Key ‘40 Act Regulations for Investment Management & Insurance Companies
By Toppan Merrill
1 min read | Industry Insights Insights Home

2020 Retrospective (1)

2020 was a year of big events that tested the investment management and insurance industries – COVID-19, business processes disruptions, and slew of new regulations. While we have not, unfortunately, seen the end of the COVID-19 pandemic and its impact on markets, we certainly won’t see an end to new rule-making as the industry and regulators are under pressure to adapt to a changing society with demands such as environmental, social, and governance (ESG) becoming more mainstream for asset management companies.

To kick off 2021, below we provide a summary retrospective of some of the key regulations that took place in 2020.

Rule 30e-3 – Option Internet Availability of Investment Company Shareholder Reports
Summary:

  • Compliance Date: January 1, 2021
  • Allows, but does not require, mutual funds to use the “Notice & Access” method to deliver Annual Reports (ARs) and Semi-Annual Reports (SARs), instead of mailing full paper reports, if certain conditions are met.
  • Allows, but does not require, variable product issuers to use the "Notice & Access" method to deliver ARs and SARs of the Underlying Funds. 

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Inline XBRL Adoption
Summary:

  • Compliance Dates:
    • Large – September 17, 2020 ($1B plus in net assets)
    • Small – September 17, 2021 (<$1B in net assets)
  • Open-end management investment companies and ETFs that are currently subject to Risk/Return Summary XBRL requirements.
  • Inline XBRL Filing of Tagged Data (Embedding XBRL within an HTML document). 

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Securities Offering and Disclosure Reforms for Business Development Companies & Registered Closed-End Funds
Summary:

  • Compliance Date: August 1, 2020
  • Ability to use shelf registration and subject to eligibility criteria comparable to those applicable to operating companies.
  • May be able to qualify and enjoy benefits of WKSIs.
  • Immediate or Automatic Effectiveness of Certain Filings: The amendments will expand the scope of rule 486 under the Securities Act of 1933 to registered closed-end funds or BDCs that conduct continuous offerings of securities, as defined under SEC rules.
  • Can benefit from access equals delivery as well as from communications safe harbors now available only to operating companies.
  • Funds will be required to include certain key prospectus disclosure in their annual reports. 

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Rule 498A - Summary Prospectus for VA/VUL
Summary:

  • Compliance Date: July 1, 2021
  • Allows, but does not require, variable contract prospectus delivery obligations to be met by sending or giving a summary prospectus to investors while providing online access to the statutory prospectus and statement of additional information (SAI) for the contract. The Proposed Rule contemplates the use of two distinct types of summary prospectuses:
  • Initial summary prospectuses covering variable contracts currently offered to new investors; and
  • Updating summary prospectuses for existing investors. 

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Fast Act – Regulation S-K
Summary:

  • Compliance Date: April 1, 2020
  • All registration statements and Form N-CSR filings will need to be filed in HTML, eliminating ASCII.
  • Exhibit hyperlinking will be required for investment company filings on forms S-6, N-1A, N-2, N3, N-4, N-5, N-6, N-14, N-8B-2 & N-CSR. 

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Toppan Merrill


Toppan Merrill, a leader in financial printing and communication solutions, is part of the Toppan Printing Co., Ltd., the world's leading printing group, headquartered in Tokyo with approximately US$14 billion in annual sales. Toppan Merrill has been a pioneer and trusted partner to the financial, legal and corporate communities for five decades, providing secure, innovative solutions to complex content and communications requirements. Through proactive partnerships, unparalleled expertise, continuous innovation and unmatched service, Toppan Merrill delivers a hassle-free experience for mission-critical content for capital markets transactions, financial reporting and regulatory disclosure filings, and marketing and communications solutions for regulated and non-regulated industries. With global expertise in major capital markets, Toppan Merrill delivers unmatched service around the world.


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