SEC Approves Expedited Applications Review Process

The SEC "will speed review for applications that are substantially identical to two other orders granted within the last three years," stated Cipperman Compliance Services in a note on the final rule. "Expedited review means that the SEC will take action within 45 days. The SEC has also set a 90-day internal deadline for exemptive applications outside of the expedited review."

Cipperman said that with the final rule, the SEC has "responded to industry concerns about the sluggish exemptive application process that has hindered product development and created an uneven playing field."

In its final rule, the SEC states that it is adopting the "substantially identical" standard largely as proposed.

"With the expedited process, we are seeking to create a new process that is both faster and more certain in its timing than the current process while maintaining sufficient time for the Staff to evaluate applications that may raise novel issues," the SEC states.

"The 'substantially identical standard' accomplishes that because it makes the expedited procedure only available for applications that closely track precedent. In most cases under this standard, the Staff should be able to issue a notice within 45 days without issuing any comments to the applicant first," the agency said.

The Investment Company Institute, the mutual fund trade group, "is very pleased the SEC adopted these expedited procedures because they will help reduce the burdens of what is sometimes a time-consuming process for funds," an ICI spokeswoman told ThinkAdvisor in a Thursday email message.

The new regulation "provides much-needed clarity for funds" and "will help foster innovation in the industry," ICI said.