Last week, California and New Jersey both upped the ante in the nationwide race to write the rules for the crypto industry:

• The California Department of Financial Protection and Innovation published an Invitation for Comments related to issues impacting blockchain and crypto businesses.
• The New Jersey State Assembly Financial Institutions and Insurance Committee approved bills that would require licenses for digital assets businesses and establish a crypto regulatory scheme.
• Players in the blockchain and digital asset industry should take advantage of opportunities to help shape the evolving regulatory landscape, such as by responding to the Invitation for Comments.

Read more here. 

On May 25, 2022, the US Securities and Exchange Commission (the SEC) proposed amendments (the Proposal) to Rule 35d-1 (the Rule) under the Investment Company Act of 1940, as amended (the 1940 Act). The Proposal comes over 20 years after the original adoption of the Rule and seeks to greatly expand the scope of the Rule in the name of investor protection and modernization.  The Proposal includes the following primary amendments to the Rule:

• Expansion of the 80% policy requirement to include funds with names that suggest the fund focuses on investments that have, or whose issuers have, “particular characteristics.”
• A requirement that any unlisted closed-end funds or BDCs that are required to have an 80% policy under the Rule, adopt such policy as a fundamental policy.
• Identification of particular circumstances under which a fund may depart from its 80% policy and specific time frames for getting back into compliance.
• Establishment of the “notional amount” as the appropriate value for a derivative instrument used by a fund when calculating compliance with a fund’s 80% policy.
• Clarification of what the SEC deems a materially deceptive and misleading use of environmental, social and governance (ESG) terminology.
• A requirement that any terms used in a fund’s name that suggest an investment focus or a tax-exempt fund, must be consistent with those terms’ plain English meaning or established industry use.
• Modernization of shareholder notice requirements.
• Establishment of certain recordkeeping requirements related to a fund’s 80% policy.

Read more here.