On 14 March 2025 the SEC pushed back the Names Rule compliance date for its 2023 amendments by six months, to 11 June 2026 for larger fund groups and 11 December 2026 for smaller ones. Just as significantly, compliance now lines up with each fund’s annual filing cycle, which for many funds is worth more than the extra six months, so if your Names Rule project was working towards a December 2025 deadline, it’s a good moment to re-plan.
What do the Names Rule amendments require?
The Names Rule is Rule 35d-1 under the Investment Company Act, which addresses fund names that are likely to mislead investors about a fund’s investments and risks. The SEC adopted the amendments to it on 20 September 2023, and they took effect on 11 December 2023. Any fund whose name suggests a focus on a type of investment, an industry, a region, or investments with particular characteristics (the SEC’s examples include “growth”, “value” and ESG terms) needs a policy to invest at least 80% of its assets in line with that name.
The fund also has to review its 80% basket at least quarterly and generally get back within 90 days if it drifts out. On top of that, it must count derivatives at notional value, define the terms in its name in the prospectus, keep written records of why each investment sits in the basket and report basket data on Form N-PORT. None of those requirements has gone away, and what has moved is the point by which they need to be in place.
How did the SEC change the Names Rule compliance date?
The extension release makes two changes to the timetable.
The first change gives every fund group six more months. Fund groups with net assets of $1 billion or more at the end of their most recent fiscal year now have until 11 June 2026 rather than 11 December 2025, while smaller groups have until 11 December 2026 rather than 11 June 2026. Size is measured across the “group of related investment companies” rather than fund by fund.
The second lets funds comply on their normal filing cycle. Under the original dates, many funds faced a choice between complying early, so that their next annual prospectus update was accurate, or paying for an extra “off-cycle” amendment just before the deadline. The SEC gave a worked example in which a December year-end fund filing under Rule 485(a) would have needed to file its annual update by 2 March 2025 to be effective on 1 May 2025, long before the original deadline.
Now an existing open-end fund has to comply at the effective date of its first annual prospectus update filed on or after its group’s compliance date. New funds comply when their initial registration statement, filed on or after that date, becomes effective. Registered closed-end funds relying on Rule 8b-16(b) comply with their first annual report sent to shareholders on or after the date, and BDCs that aren’t continuously offered comply with their first Form 10-K on or after it.
The SEC says that, depending on fiscal year end, some funds now have close to an extra year. On the release’s own logic, a December year-end fund in a larger group would typically come into line with its annual update in spring 2027.
The industry had asked for more, with two industry letters, from the ICI and the IAA, asking for at least 18 months. The SEC gave six, together with the on-cycle change.
Why did the SEC act?
The release is unusually candid about what’s slowing funds down, and very little of it concerns legal drafting. Names Rule compliance needs legal, compliance, portfolio management, reporting, distribution and technology teams working together, often with outside vendors, and service providers’ systems were still being built, with some new versions not expected until summer 2025.
Some legacy systems couldn’t support the recordkeeping, and the SEC notes that the written record behind including an investment in the 80% basket could involve up to 50 data points. Funds with several subadvisers, each defining the same name term in its own way, and funds holding derivatives found it harder still.
All of this points to a data challenge rather than a drafting one, because the rule asks you to show, investment by investment and quarter by quarter, that the fund’s name is accurate, which makes governed fund data management as important to the project as the prospectus wording.
What didn’t change in the Names Rule?
The substance of the rule itself is untouched by the extension. The 80% policy, the quarterly review, the 90-day cure, notional derivatives, prospectus definitions, the 60-day notice of policy changes and the N-PORT reporting all stand as adopted, and the effective date of the amendments remains 11 December 2023.
The staff’s Names Rule FAQs, posted on 8 January 2025, still help at the margins, for example on whether “income” or “tax-efficient” in a name triggers an 80% policy. Like all staff statements, though, they aren’t rules and carry no legal force.
When does your fund need to comply?
- 20 September 2023: the SEC adopts the Names Rule amendments
- 11 December 2023: the amendments take effect
- 8 January 2025: SEC staff publish the Names Rule FAQs
- 14 March 2025: the SEC extends the compliance dates and ties them to annual filings
- 20 March 2025: the extension takes effect
- 11 June 2026: compliance date for fund groups with $1 billion or more in net assets
- 11 December 2026: compliance date for smaller fund groups
- First annual update filed on or after your group’s date: when an existing open-end fund must comply
What should investment managers do now?
- Re-plan around your filing calendar by mapping each fund’s fiscal year end to its first on-cycle update after the compliance date, and working back from there.
- Agree once how each name term is defined and which investments qualify, across every subadviser, before systems are built around those definitions.
- Make sure basket inclusion, the data behind it and the quarterly review are recorded in a form you can show a regulator.
The extra time is most useful if it goes into the data and the evidence trail, since those are the parts of the rule that the SEC’s own release identifies as taking longest to build.
At Kurtosys we help investment managers keep fund data governed, so the definitions, policies and holdings behind a fund’s name flow consistently into prospectuses, regulatory documents, factsheets, client reports and fund websites. When a name or an 80% policy changes, that’s one controlled update with an audit trail rather than a hunt through every document that carries it. If you’d like to talk through what the new dates mean for your range, get in touch.
Sources: SEC: SEC Extends Compliance Dates for Amendments to Investment Company Names Rule (press release 2025-54), SEC: Investment Company Names; Extension of Compliance Date (Release 33-11368; IC-35500), SEC: Investment Company Names (Release 33-11238), SEC Division of Investment Management: 2025 Names Rule FAQs, as at 1 April 2025.
About this article
This article reflects the position at 1 April 2025 and was checked against the primary sources available at that time. Thomas Bjerkén, our regulatory reporting and fund data specialist, joined Kurtosys after it was published and now looks after our regulatory content. The SEC Names Rule has moved on since. For the latest position, see The US Names Rule is ten days away: what larger fund groups need in place.
