EDGAR upgrade supports SEC fund names rule taxonomy

Posted on January 7, 2024 by Editor

In late December last year the US Securities and Exchange Commission (SEC) updated its EDGAR system to version 23.4, providing support for the new Fund (FND) Taxonomy, which has been specifically tailored for tagging elements associated with the recent final rule on Investment Company Names.

Despite technical hitches in this version, the SEC assures stakeholders that the 2024 release will address these challenges, incorporating the awaited fnd-entire entry point.

The Names Rule (rule 35d-1), which was updated and upgraded in September 2023, is designed to prevent investment funds misleading investors through inaccurate names. The rule, in operation since 2001, now mandates funds to align 80% of assets with their name’s focus.

The expanded rule now applies to funds with names highlighting specific attributes such as “growth” or “value” and those linked to environmental, social or governance (ESG) topics. Funds falling under these categories must now include explicit disclosures in their prospectus, defining the terms used in their names and outlining the criteria used for selecting investments that line up with their moniker. This information is required to be tagged with Inline XBRL, providing investors and analysts with a streamlined means of accessing and comparing disclosures related to fund names and their investment policies across various reporting periods.

For those navigating the FND Taxonomy, the SEC has released a Taxonomy Guide, which can be found here.

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