Helping clients meet their business challenges begins with an in-depth understanding of the industries in which they work. That’s why KPMG LLP established its industry-driven structure. In fact, KPMG LLP was the first of the Big Four firms to organize itself along the same industry lines as clients.

How We Work

We bring together passionate problem-solvers, innovative technologies, and full-service capabilities to create opportunity with every insight.

Learn more

Careers & Culture

What is culture? Culture is how we do things around here. It is the combination of a predominant mindset, actions (both big and small) that we all commit to every day, and the underlying processes, programs and systems supporting how work gets done.

Learn more

SEC amends the fund ‘Names Rule’

Defining Issues | September 2023

Amendment seeks to enhance transparency and provide better investor clarity into a fund’s strategy.

sec private fund advisers content image

The final rule amends Section 35d-1 of the Investment Company Act of 1940, the Names Rule, to address the evolution of the funds industry since it was first adopted.


Release Nos. 33-11238, 34-93438, IC-35000; File No. S7-16-22

  • Certain funds governed by the Investment Company Act (registered investment companies, business development companies or unit investment trusts)

Relevant dates

  • The final rule will be effective 60 days after publication in the Federal Register and compliance with the amendments will be required within the following time periods:
  • Fund groups with net assets of ≥ $1 billion, 24 months
  • Fund groups with net assets of < $1 billion, 30 months

Key Impacts:

The SEC issued a Fact Sheet summarizing the key provisions of the final rules. 

Modernizes the 80% investment policy requirement:

  • Expands the scope to apply to any fund names that include terms suggesting the fund focuses on investments that have, or whose issuers have, particular characteristics (feature, quality, or attribute) – e.g. ESG, sustainable, green, value, growth, artificial intelligence.
  • Requires investments selected to have a meaningful connection with the fund’s suggested focus, such as an industry affiliation or source of revenue.
  • Requires at least quarterly checks that the fund complies with its defined 80% investment policy.
  • Specifies circumstances in which a fund may temporarily depart from its 80% investment policy, generally requiring a fund to come back into compliance within 90 days. This is a change from the 30-day period to return to compliance that was in the proposal.
  • Requires a fund to use a derivative instrument’s notional amount, rather than its market value, for purposes of determining the fund’s compliance with the 80% investment policy requirement.
  • Generally prohibits a closed-end fund or business development company that is not listed on a national exchange from changing its 80% investment policy without shareholder approval, subject to certain exceptions.

Clarifies the materially deceptive and misleading use of terminology in certain fund names:

  • Requires additional disclosures in fund prospectuses to define terms used in a fund’s name and the specific criteria the fund uses to select the investments the term describes.
  • Requires terms to be consistent with those terms’ plain English meaning or established industry use, and disclosed in the prospectus. For example, a fund named ‘sustainable fashion’ would need additional context disclosed to enable an understanding of how this term is interpreted and distinguished among funds.
  • The proposal included an approach to categorize ESG ‘integration funds’ as materially deceptive and misleading in certain circumstances; however, the final rule takes no further action on this topic at this time.
  • A fund name may be materially deceptive or misleading even if the fund complies with its 80% investment policy; there is no safe harbor.

Other amendments:

  • Amends Form N-PORT to require disclosure of which investments align with the fund’s 80% investment policy and other Names Rule compliance information.
  • Modernizes the notice requirement to expressly address the use of electronic delivery methods for providing information to shareholders, including a change to the fund’s 80% investment policy as well as a change in the fund’s name.

Explore more

Meet our team

Image of Eric Goldberg
Eric Goldberg
Partner, Dept. of Professional Practice, KPMG US
Image of Richard Sumida
Richard Sumida
Managing Director, Dept. of Professional Practice, KPMG US

Accounting Research Online

Access our accounting research website for additional resources for your financial reporting needs.

Thank you!

Thank you for contacting KPMG. We will respond to you as soon as possible.

Contact KPMG

Use this form to submit general inquiries to KPMG. We will respond to you as soon as possible.

By submitting, you agree that KPMG LLP may process any personal information you provide pursuant to KPMG LLP's Privacy Statement.

An error occurred. Please contact customer support.

Job seekers

Visit our careers section or search our jobs database.

Submit RFP

Use the RFP submission form to detail the services KPMG can help assist you with.

Office locations

International hotline

You can confidentially report concerns to the KPMG International hotline

Press contacts

Do you need to speak with our Press Office? Here's how to get in touch.