April 12, 2021

Sarah G. ten Siethoff
Acting Division Director and the Associate Director for the Rulemaking Office,
Division of Investment Management
Securities and Exchange Commission
100 F Street NE
Washington, DC 20549

Re: Rule 17a-7 Rulemaking

Dear Sarah,

The Asset Management Group (“AMG”) of the Securities Industry and Financial Markets Association (“SIFMA”)1 appreciates the opportunity to provide recommendations to the United States Securities and Exchange Commission (the “Commission”) on potential rulemaking related to Rule 17a-7 under the Investment Company Act of 1940, as amended (the “Investment Company Act”), that would seek to modernize and streamline the application of Rule 17a-7, in particular as it relates to cross trades of fixed income securities.

We previously discussed with the staff of the Commission the possibility of temporary relief with respect to new Rule 2a-5 under the Investment Company Act, which addresses valuation practices and the role of the board of directors with respect to the fair value of the investments of a registered investment company (a “fund”).2 The requested relief would have allowed current cross trade practices relating to fixed income securities to continue following the September 8, 2022 compliance date for Rule 2a-5, notwithstanding the new definition of “readily available” market quotations. Since those discussions, the staff issued a Statement (the “Statement”) concerning fund trades made in reliance on Rule 17a-7 and soliciting feedback on ways to enhance fund cross trading regulation.3 We are now writing to respond to the Statement and to offer our recommendations on how best to modernize Rule 17a-7 to reflect current fixed income markets and transaction practices.4 We urge the Commission to act favorably on our recommendations and would welcome the opportunity to discuss this with you further.