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SEC Press Releases·

SEC Proposes Expanding Securities Eligible for Cross Trading by Registered Funds

  • The SEC proposed amendments to the Investment Company Act cross-trading rule (Rule 17a-7) on October 9, 2026, to modernize & expand conditions for transactions between registered funds & their affiliates.
  • The amendments aim to allow beneficial cross trades that reduce trading costs & pass savings to investors while implementing enhanced investor protection measures.
  • SEC Chairman Paul S. Atkins stated the proposal addresses modern market realities & helps deliver additional cost savings by avoiding open market trade expenses.
  • The proposal seeks to restore the ability to cross-trade most fixed-income securities, which was effectively restricted by the 2020 fund valuation rule.
  • Modernized conditions will recognize more verifiable & transparent market pricing developments.
  • Registered funds engaging in cross trades must provide aggregated reporting of trading activity to ensure additional transparency.
  • The proposal will be published on SEC.gov & in the Federal Register, with a 60-day comment period following publication.