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SEC Proposes Streamlining Financial Information for Fund Acquisitions

The SEC has proposed modernizing the financial information for acquisitions and dispositions, including the acquisitions of investment companies. Proposed changes to Regulation S-X and Form N-14 include eliminating certain pro forma financial statement requirements and changing the “significant subsidiary” test. The proposal also includes specific reporting rules for investment companies rather than relying on financial statement requirements generally applicable to the acquisition of operating companies.

Revising the investment company acquisition process should facilitate legitimate transactions while ensuring that shareholders receive relevant, rather than voluminous, financial information.