Fund of Funds Investments
The Securities and Exchange Commission (``Commission'') is adopting three new rules under the Investment Company Act of 1940 that address the ability of an investment company (``fund'') to acquire shares of another fund. Section 12(d)(1) of the Act prohibits, subject to certain exceptions, so-called ``fund of funds'' arrangements, in which one fund invests in the shares of another. The rules broaden the ability of a fund to invest in shares of another fund in a manner consistent with the public interest and the protection of investors. The Commission also is adopting amendments to forms used by funds to register under the Investment Company Act and offer their shares under the Securities Act of 1933. The amendments improve the transparency of the expenses of funds of funds by requiring that the expenses of the acquired funds be aggregated and shown as an additional expense in the fee table of the fund of funds.