SEC Order Granting Waivers of Disqualification Provisions for Investment Advisers in Share Class Selection Disclosure Initiative

The Securities and Exchange Commission grants waivers from disqualification provisions under Regulations A, D, and Crowdfunding, as well as waivers from ineligibility under Rule 405, to specific investment advisers and issuers participating in the Share Class Selection Disclosure Initiative. These waivers apply to Merrill Lynch, Pierce, Fenner & Smith, Incorporated, Eagle Strategies LLC, Bank of America Corporation, and BofA Finance LLC, allowing them to maintain access to exemptions from registration despite administrative orders related to disclosure failures. The Commission determines that good cause exists for these waivers based on the advisers' self-reporting and consent to standardized settlement terms, provided they comply with the order conditions. The order explicitly states that it cannot be relied upon by other entities seeking future waivers and reserves the right to revoke or further condition the waivers if the recipients fail to comply with the SCSD Order terms.

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UNITED STATES OF AMERICA
Before the
SECURITIES AND EXCHANGE COMMISSION
SECURITIES ACT OF 1933
Release No. 10774 / April 17, 2020
In the Matter of

Certain Investment
Advisers Participating in the Share Class
Selection
Disclosure Initiative,

Respondents.

ORDER UNDER RULES 262(b)(2),
405, 506(d)(2)(ii), AND 602(e) OF THE
SECURITIES ACT OF 1933 AND RULE
503(b)(2) OF REGULATION
CROWDFUNDING GRANTING WAIVERS
OF THE DISQUALIFICATION
PROVISIONS OF RULES 262(b)(3),
506(d)(1)(iv), AND 602(c)(3) OF THE
SECURITIES ACT OF 1933, RULE
503(a)(4)(ii) OF REGULATION
CROWDFUNDING, AND GRANTING
WAIVERS FROM BEING INELIGIBLE
ISSUERS
I.
In February 2018, the Division of Enforcement (the “Division”) announced the Share Class Selection Disclosure Initiative (the “SCSD Initiative”), a self-reporting program designed to address potentially widespread violations of the federal securities laws resulting from investment advisers failing to make required disclosures relating to their selection of mutual fund share classes that paid the advisers (as dually registered broker-dealers) or their related entities or individuals a fee pursuant to Rule 12b-1 of the Investment Company Act of 1940 (“12b-1” fee) when a lower-cost share class for the same fund was available to clients.

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