EXCEPTED INVESTMENT FUND V EXEMPTIONS FOR MUTUAL FUNDS

EXCEPTED INVESTMENT FUND V. EXEMPTIONS FOR MUTUAL FUNDS Transition Readiness Series May 19, 2016

Excepted Investment Fund (EIFS) Exemptions for Mutual Funds Year Created 1978 1996 Law Ethics in Government Act (5 USC app 101 -112) Acts affecting a personal financial interest (18 USC 208) Regulation 5 CFR 2634 5 CFR 2640 Purpose Reduce financial disclosure Provide relief from criminal reporting burden conflict of interest statute

Excepted Investment Fund Mutual Fund Financial Disclosure Concept Conflict of Interest Concept Determines if Holdings of Fund Determines if Fund is Exempted are Reportable under the EIGA from 18 USC 208 Financial Disclosure requirements Defined in 5 CFR § 2634. 310(c)(2) Defined in 5 CFR § 2640. 102(k) 3 -prong test: 1) Widely held 2) Publicly traded or available, OR widely diversified 3) Independently managed An entity registered with the SEC as a management company under the Investment Company Act of 1940

Excepted Investment Fund Three-Prong Test: 1. 2. 3. Widely held; Publicly traded or available, or Widely diversified; and Independently managed If the test is met, the filer does not have to disclose the underlying holdings of the fund.

Exemptions for Mutual Funds 1. Is the fund registered with the SEC under the Investment Company Act of 1940? 2. Does the fund have a stated policy of concentrating its investments?

NOTE: Just because something qualifies as an EIF does not mean that it automatically qualifies as a diversified mutual fund that is exempt from 18 U. S. C. § 208. You must check to see that it qualifies for the diversified mutual fund exemption.

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