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After several delays, compliance with most sections of the SEC’s amended Investment Company Act Names Rule (Rule 35d-1), began on June 11, 2026 for larger fund groups with $1 billion dollars or more in net assets and will begin on December 11, 2026 for smaller fund groups with less than $1 billion in net assets.
Additionally, the SEC also extended Form N-PORT compliance deadlines to November 17, 2027 for fund groups with $10 billion or more in assets and May 18, 2028 for fund groups with less than $10 billion in assets. These compliance dates have been so significantly extended because the SEC is considering eliminating the N-PORT changes associated with the amended rule and therefore wants fund groups to avoid incurring expense preparing for requirements that may not go into effect.
Under the revamped Names Rule, if a fund’s name suggests a focus on a particular asset type, industry or strategy, at least 80% of its assets must be invested in line with that description. Ensuring compliance will require managers of these funds to ensure their names accurately reflect their investments and underlying risks, which requires a review of each individual asset held in the fund. Managers will need to cross reference individual fund holdings against key reference data, while analyzing fund holdings at a granular level to determine their compliance with threshold rules. This policy must be consistently applied and monitored.
Additional record-keeping rules will also need to be followed, including six-year retention of:
- Written records from the time of investment evaluations and quarterly evaluations, including a fund’s basis for having each investment in its 80% bucket.
- A record of any identified departure from the 80% threshold and reason for the departure.
- A record of any shareholder notice provided in accordance with the rule.
Names Rule reporting should be viewed as transparency into fund holdings, truth in fund labeling and reputational risk management and more than just compliance. This latest amendment to the Names Rule is designed to dissuade managers from using broad categories of investment company names that might mislead investors. Particular focus was given to addressing potentially materially deceptive and misleading usages of terms such as “growth,” “value,” and “ESG” terminology in fund names.
Under the Names Rule, a fund may not deviate from a fundamental policy unless it has been authorized by the vote of a majority of its outstanding shareholders.
The Unit Investment Trust (UIT) exception
Unlike managed funds (both open- and closed-end) that must constantly track compliance and file ongoing Form N-PORT basket percentages, a UIT is only required to comply with the 80% investment policy at the time of the initial deposit of securities. Because a UIT portfolio is fixed and does not change over time, it is exempt from ongoing portfolio rebalancing requirements and Form N-PORT reporting obligations under this rule.
Inline XBRL requirements
A new element to Fund Name compliance is the requirement for funds with an 80% investment policy to tag related name definitions, selection criteria and Form N-PORT basket percentages using the Fund Name Disclosure (FND) taxonomy in Inline XBRL.
Filers will use the FND taxonomy in conjunction with the Open-End Fund (OEF) or Closed-End Fund (CEF) taxonomies as appropriate. Prospectus definitions of terms used in the fund’s name and specific investment selection criteria must be Inline XBRL tagged.
The Fund Name Disclosure (FND) taxonomy is a standalone taxonomy that only contains a small set of text block elements designed to capture the definitions and investment criteria mandated by amended Rule 35d-1.
How entry points dictate tagging
The SEC provides separate entry points depending on the filer type and type of filing:
- Open-End Funds – Links the FND taxonomy to the standard Open-End Fund (OEF) schema for Form N-1A filings.
- Closed-End Funds – Integrates with Closed-End Fund (CEF) architecture for Form N-2 filings.
- Unit Investment Trusts (UIT) – UITs must embed their Inline XBRL disclosures directly into their registration statements using the dedicated UIT entry point provided in the FND taxonomy.
UIT issuers have not previously been required to file XBRL, thus, this new requirement will be a learning curve and additional compliance burden for compliance personnel. As we’ve indicated above, the modernized Fund Names Rule (Rule 35d-1) applies differently for UITs than it does for Open-End Mutual Funds or Closed-End Funds. Because UITs feature static portfolios that are established at the fund’s inception, the SEC tailored both the compliance logic and the Inline XBRL tagging layout specifically for UIT registration forms.
In summary, the amended Names Rule is designed to:
- Improve transparency and clarity
- Reduce misleading expectations created by fund names
- Strengthen alignment between a fund’s name, investments and risks
- Enhance investor protection and confidence
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If you have questions about SEC rules or would like assistance, the experts at Toppan Merrill can help. We also offer a range of additional resources so filers have the knowledge required to meet their SEC disclosure requirements. Contact us today!
