SEC Rule 38a-1

The rule formalizes the creation, implementation, oversight, and documentation of internal compliance policies, with particular emphasis on board oversight and the role of a designated Chief Compliance Officer (CCO).

Each fund must adopt and implement written policies and procedures designed to prevent violations of federal securities laws. These policies must include oversight mechanisms for the fund’s key service providers: investment adviser, principal underwriter, administrator, and transfer agent.

The fund’s board of directors, including a majority of independent directors (not “interested persons”), must approve the fund’s compliance policies and the policies of the fund’s service providers.