Investment Services Shareholder Deborah Bielicke Eades recently commented on the SEC’s changes to its liquidity rule and the burden on firms for implementing the rule’s controversial bucketing requirement in Compliance Reporter.

The article states, “The SEC’s liquidity rule requires funds to sort their holdings into four different “buckets,” based on how long they expect it would take them to sell. The fund industry has pushed back against that provision, arguing that it is overly prescriptive and will be difficult to implement.” Ms. Eades noted that although the SEC indicates that it would be open to requests for exemption, firm’s will have a tough time doing obtaining relief.

“It’s a challenging course to try to get relief,” she explains. “You’d be going in and saying that we think we have a better system than what you’ve proposed, and that seems like a tough road to get relief.” Ms. Eades noted that another issue is timing. Because it typically takes 12-18 months for the agency to grant a relief request, the article notes “even if a fund is ultimately successful it might be too late to save them the trouble of implementing a bucketing system in compliance with the SEC rule.”

To read the article in full, please click here. (Subscription may be required).

If you have questions concerning the SEC’s liquidity rule and its impact on your firm, please contact Deborah Bielicke Eades at +1 (312) 609 7661, any member of our Investment Services group or the Vedder Price attorney with whom you have previously worked.