Phillip Goldstein is the co-founder of Bulldog Investors. This post is based on his comment letter to the SEC Division of Investment Management.
I. Any Limitation on Voting Rights of a Shareholder of a CEF Violates Sections 16 and 18 and the ICA.
The May 27, 2020 Statement did not disavow the Boulder Letter’s reasoning or its conclusion that a CEF would violate Section 18(i) of the Investment Company Act of 1940 (the “ICA”) by opting into a state control share statute (“CSS”). The May 27th Statement solicited comments on, among other things, the following point:
Apart from 18(i), which turns on the meaning of “equal voting rights,” please explain whether the ability to opt-in to and trigger a control share statute would have a practical or functional impact on a fund’s compliance with other provisions of the federal securities laws, such as section 12(d)(l)(E) of the Act, which requires pass-through or mirror voting for certain fund of funds arrangements, or rule 13d-l under the Securities Exchange Act of 1934, which places a limitation on the ability of certain shareholders from voting based on the size of their holding. If relevant, please provide an analysis of any practical or functional differences between how the principle of equal voting rights may apply in those different regulatory contexts.
