July 21, 2020

Vanessa Countryman
Secretary
Division of Investment Management
U.S. Securities and Exchange Commission
100 F Street, N.E.
Washington, DC 20549

Re: Good Faith Determinations of Fair Value
File No. S7-07-20

Dear Ms. Countryman:

The Asset Management Group (“AMG”) of the Securities Industry and Financial Markets Association (“SIFMA”)1 appreciates the opportunity to provide comments to the United States Securities and Exchange Commission (the “Commission”) on the Commission’s proposed new Rule 2a-5 under the Investment Company Act of 1940, as amended (the “Investment Company Act” or the “1940 Act”), that would address valuation practices and the role of the board of directors with respect to the fair value of the investments of a registered investment company or business development company (a “fund”) (the “Proposed Rule”). In addition, AMG is also providing comments on the Commission’s proposal to rescind previously issued guidance on the role of a fund’s board in determining fair values and other aspects of the Proposing Release (together with the Proposed Rule, the “Proposal”).2

AMG generally supports the object of the Proposed Rule – to specify how a board or registered investment adviser acting at the direction of a board (“adviser”) must make good faith determinations of fair value, as well as when the board can assign this function to an adviser, while still ensuring that fund investments are valued in a way consistent with the 1940 Act. To assist the Commission in finalizing the Proposed Rule, AMG will address the following matters:

(i) board reporting;
(ii) price challenges;
(iii) the impact of recent adverse market conditions;
(iv) the importation of U.S. generally-accepted accounting principles (“U.S. GAAP”) into a rule under the 1940 Act;
(v) the rescission of existing guidance on fair valuation; and
(vi) other topics, including the role of sub-advisers, striking the right balance on assignment, compensation, back-testing, and fair value methodologies.

1 SIFMA AMG brings the asset management community together to provide views on U.S. and global policy and to create industry best practices. SIFMA AMG’s members represent U.S. and global asset management firms whose combined assets under management exceed $45 trillion. The clients of SIFMA AMG member firms include, among others, tens of millions of individual investors, registered investment companies, endowments, public and private pension funds, UCITS and private funds such as hedge funds and private equity funds. For more information, visit http://www.sifma.org/amg.

2 Good Faith Determinations of Fair Value, Release No. IC-33845 (April 21, 2020), Federal Register 85:93 (May 13, 2020) p. 28734, available at https://www.govinfo.gov/content/pkg/FR-2020-05-13/pdf/2020-08854.pdf (the “Proposing Release”).