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B. G., Opalesque Geneva:

The Securities and Exchange Commission has approved an update to the Investment Company Act of 1940 "Names Rule." This rule addresses fund names that are likely to mislead investors about a fund's investments and risks.

"As the fund industry has developed over the last two decades, gaps in the current Names Rule may undermine investor protection," said SEC Chair Gary Gensler. "Today's final rules will help ensure that a fund's portfolio aligns with a fund's name. Such truth in advertising promotes fund integrity on behalf of fund investors."

The 80 percent investment policy

Typically, a fund's name is the first piece of information that investors receive about the fund. The Names Rule currently requires registered investment companies whose names suggest a focus on a particular type of investment to adopt a policy to invest at least 80% of the value of their assets in those investments. The amendments will also require that a fund review its portfolio assets' treatment under its 80% investment policy at least quarterly and will include specific time frames - generally 90 days - for getting back into compliance if a fund departs from its 80% investment policy.

The amendments will include enhanced prospectus disclosure requirements for terminology used in fund names, including a requiremen......................

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