Global Investment Law Watch – Exploring the legal and regulatory issues affecting the worldwide investment community.

United States: Supreme Court Scissors up Saba’s Rescission Argument Under Section 47(b) of the 1940 Act

Jun 11 2026

By: Thoreau A. Bartmann, Varu Chilakamarri, Jennifer R. Gonzalez, Charles M. Ponder, and Steve Topetzes

Background

The Supreme Court agreed to hear FS Credit Opportunities Corp., et al. v. Saba Capital Master fund, et al. to resolve whether Section 47(b) of the Investment Company Act of 1940 (Act) allows private parties to bring lawsuits against registered investment companies to rescind contracts (including corporate bylaws) that allegedly violate the Act.

United States: Supreme Court Holds SEC Does Not Need to Prove Pecuniary Loss in Disgorgement

Jun 11 2026

By: Thoreau Bartmann, Meghan Flinn, and Steve Topetzes

On 4 June 2026, the Supreme Court unanimously decided Sripetch v. SEC, ruling that the SEC does not need to prove that victims of a securities law violation suffered pecuniary loss to obtain disgorgement.

United States: Show Me the Money: SEC Risk Alert Highlights Advisers’ Economic Conflict

Jun 11 2026

By: Thoreau Bartmann, Jennifer Klass, Pablo Man, and Keri Riemer

On 9 June 2026 the SEC Division of Examinations published its second risk alert since Atkins became chair. The Risk Alert reminds investment advisers of their fiduciary obligation to disclose economic conflicts of interest that might cause advisers and their financial professionals to recommend certain products, services, or account types. Citing the SEC’s fiduciary interpretation from 2019 and longstanding examination priorities, the Risk Alert identifies the following areas of concern:

United States: SEC’s Updated Qualified Client Standards Take Effect 29 June 2026

May 29 2026

By: Sasha Burstein, Pablo J. Man, Mark T. Heine, Edward T. Dartley, and George Zornada

The United States Securities and Exchange Commission’s (SEC) inflation adjustment to the qualified client thresholds under Rule 205-3 of the Investment Advisers Act of 1940 will become effective on 29 June 2026, and will carry important implications for SEC-registered investment advisers (RIAs) that charge performance-based compensation tied to capital gains or investment appreciation.

United States: The SEC Finally Admits It, The No-Admit/No-Deny Policy Is Gone

May 19 2026

By: Thoreau Bartmann, Meghan Flinn, Ted Kornobis, Hayley Trahan-Liptak, and Neil Smith

On 18 May 2026, the United States Securities and Exchange Commission (SEC) rescinded the rule barring settling defendants from publicly denying the agency’s allegations. The policy, in place since 1972, effectively silenced settling defendants on pain of having their cases reopened. Now, defendants can publicly dispute SEC allegations, including under existing consent judgments.

United States: Keeping Up Tradition: Director Woodcock’s Signals a Continuation of Recent Enforcement Priorities

May 18 2026

By: Meghan E. Flinn, Hayley Trahan-Liptak, Thoreau A. Bartmann, and Steve G. Topetzes

One week into the role, new Securities Exchange Commission (SEC) Enforcement Director David Woodcock used his first public remarks to reinforce the enforcement tone set by Chairman Atkins: “quality over quantity” and “back to basics.”

Europe: Ireland’s Private Funds Regime Gets a Major Overhaul: Central Bank Publishes Revised AIF Rulebook

May 06 2026

By: Gayle Bowen and Shane Geraghty

The Central Bank of Ireland (the Central Bank) today published its long-awaited revised AIF Rulebook, consolidating and modernising the regulatory framework for Irish alternative investment funds (AIFs). The revised Rulebook introduces a number of important flexibilities that will be welcomed by industry and will provide greater flexibility to investment managers when structuring their investment funds to better meet investors’ needs.

United States: Private Equity Sunshine Act (SB 1319)

May 04 2026

By: Sasha Burstein, Ami R. Jani, Andrew J. Feucht III, Mark T. Heine, Daniel F.C. Crowley, Karishma S. Page, J. Matthew Mangan, and Ruth E. Delaney

California legislators are advancing the proposed Private Equity Sunshine Act (SB 1319) amending the California Public Records Act to require expanded disclosure by California public investment funds, including state and local pension systems, regarding their alternative investments. The bill would affect both public pension investors and fund managers with California public pension plans as investors.

Europe: AIFMD II Transposition: Ireland Reaches a Key Milestone

Apr 30 2026

By: Gayle Bowen and Shane Geraghty

Ireland has taken a significant step forward in the implementation of the Alternative Investment Fund Managers Directive II (AIFMD II), with confirmation that the enabling Statutory Instruments have now been signed and are set to come into force.

United States: What a Relief! Sec Staff Extends Co-Investment Orders to Open-End Funds and Allows Delegation to Board Committee

Apr 28 2026

By: Jon-Luc Dupuy, Jennifer R. Gonzalez, Mark P. Goshko, Jordan A. Knight, Pablo J. Man, Keri E. Riemer, Tristen Rodgers, and George Zornada

On 27 April 2026, the staff (Staff) of the Securities and Exchange Commission (SEC) issued a no-action letter that extends to open-end funds, subject to certain conditions, exemptive relief that permits business development companies (BDCs) and registered closed-end funds to co-invest alongside affiliates in transactions otherwise prohibited under Sections 17(d) and 57(a)(4) of the Investment Company Act of 1940, as amended. This relief opens the door for open-end funds to participate, subject to their 15% liquidity restrictions, in co-investment transactions that were previously unavailable to these funds.