The U.S. Securities and Exchange Commission (SEC) is looking for ways to stamp out the use of misleading investment fund names.
The SEC already has a rule that is intended to prevent funds from using deceptive names, but it’s now seeking feedback on ways to bolster those restrictions.
The regulator said that developments since the existing rule was adopted back in 2001, such as the increasing use of derivatives, impact the effectiveness of the rule.
“The request for comment solicits information to determine whether the rule continues to accomplish its purpose to protect investors and help ensure they are not misled by a fund’s name,” the commission said.
“We are looking to investors and market participants for input on how our framework can be improved to help ensure that fund names inform and do not mislead investors,” SEC chairman Jay Clayton said in a statement.
“This request for comment is another important step in our efforts to better inform and protect Main Street investors and improve the investor experience,” Clayton added.
The SEC’s request will go out for a 60-day comment period.