ICI Releases Form of Fund of Funds Agreement to Assist with Rule 12d1-4 Compliance

The Investment Company Institute (“ICI”) recently published a sample form of fund of funds investment agreement (the “Form Agreement”) to assist registered investment companies and business development companies (“Registered Funds”) desiring to operate as funds of funds in compliance with the new Rule 12d1-4 under the Investment Company Act of 1940, as amended (the “1940 Act”).  Rule 12d1-4, which was adopted by the SEC on October 7, 2020,[i] permits a Registered Fund to acquire the securities of another Registered Fund in excess of the limits found in section 12(d)(1) of the 1940 Act without acquiring an exemptive order, provided that certain conditions are met.  The Form Agreement is intended to help Registered Funds implement the new rule (including its condition that acquiring Registered Funds who do not share an investment adviser with the acquired fund enter into a fund of funds investment agreement memorializing the terms of their fund of funds arrangement prior to exceeding the investment limitations under section 12(d)(1)).  To this end, the Form Agreement includes annotations that are intended to highlight certain issues and to assist in customizing the Form Agreement.


Copies of the Form Agreement and ICI’s memorandum regarding the Form Agreement are available online to persons with ICI user accounts[ii] through the following link.


Please feel free to contact us if you have any questions regarding compliance with Rule 12d1-4 or the regulation of registered investment companies generally.


By the Investment Management and Broker-Dealer Team at Kilpatrick Townsend & Stockton

[i] SEC Press Release 2020-247, “SEC Updates Regulatory Framework for Fund of Funds Arrangements” (Oct. 7, 2020), https://www.sec.gov/news/press-release/2020-247.
[ii] You can obtain an ICI user account by following the “Apply for User Account” link on the ICI website’s home page (www.ici.org).


Knowledge assets are defined in the study as confidential information critical to the development, performance and marketing of a company’s core business, other than personal information that would trigger notice requirements under law. For example,
The new study shows dramatic increases in threats and awareness of threats to these “crown jewels,” as well as dramatic improvements in addressing those threats by the highest performing organizations. Awareness of the risk to knowledge assets increased as more respondents acknowledged that their