The Securities and Exchange Commission has issued an order that grants exemptions from certain requirements of the Investment Company Act of 1940, the regulator announced today.

The relief, the latest in a series of steps the SEC has taken to assist financial market participants in addressing the impacts of the coronavirus, provides temporary flexibility for registered funds affected by recent market events to borrow funds from certain affiliates and to enter into certain other lending arrangements.

SEC chairman Jay Clayton said the temporary action will provide an additional tool that funds can use to manage their portfolios for the benefit of their investors in the current market environment. “This action provides funds with additional flexibility to navigate volatile markets while meeting their obligations to investors,” he said in a statement.

The SEC noted that the order is necessary and appropriate in the public interest and consistent with the protection of investors. It provides the following relief from the Investment Company Act:

• Relief permitting registered open-end funds and insurance company separate accounts to borrow money from certain affiliates

• Relief that permits additional flexibility under existing interfund lending arrangements and extends the ability to use interfund lending arrangements to funds that do not currently have exemptive relief

• Relief that permits registered open-end funds to enter into lending arrangements or borrowings that deviate from fundamental policies, subject to prior board approval

The SEC encourages firms and financial professionals affected by the coronavirus to contact the staff with questions and concerns. The regulator said its staff continues to assess impacts relating to the coronavirus on investors and market participants and will consider additional relief from other regulatory requirements where necessary or appropriate.

Last week, the SEC provided relief that addressed both the needs of personal safety and the maintenance of reliable financial markets by covering in-person board meetings and certain filing and delivery requirements for certain investment funds and investment advisors.

The SEC said the temporary relief will extend until the date specified in a public notice from the staff. That date will be at least two weeks from the date of the notice and no earlier than June 30. Additional relief may be provided as circumstances warrant, the SEC said.

The SEC's website provides additional information regarding its response.

For general questions or concerns related to impacts of the coronavirus on the operations or compliance of funds and advisers, please email [email protected].