SEC Staff Ends Mixed and Shared Funding Orders for Insurance Products
The staff of the Division of Investment Management has issued guidance indicating that fund sponsors need not seek mixed and shared funding orders in order to offer its funds as investment options in one or more variable annuity and/or variable life insurance contracts of affiliated and/or unaffiliated life insurers. Historically, funds sponsors had to obtain these orders to ensure exemption from certain provisions of the Investment Company Act. The staff indicates that most fund sponsors do not rely on the exemptions from the rules in any event and asks firms to question the need to seek such orders.
OUR TAKE: For those firms in the insurance space, this is kind of a big deal, as many firms have historically been saddled with the requirement to obtain the mixed and shared funding orders.