Abstract
Securities regulation is not supposed to look like corporate law, yet in the market for interval and tender-offer funds, it increasingly does. The SEC’s modern exemptive practice for these registered investment vehicles—funds that offer periodic liquidity while investing in less-liquid strategies—is doing more than granting individualized relief. In effect, it is transforming the Investment Company Act’s closed-end structural constraints from mandatory architecture into conditional defaults that permit product modularity (particularly in terms of multiple share classes and distribution and servicing fees) when paired with governance and disclosure safeguards. The result is a distinctly corporate-governance-like move in federal securities regulation: The SEC has created a menu of design choices, reminiscent of state corporate law’s default-rule framework, that expands investor access to semi-liquid strategies while preserving investor protection through conditions that substitute for the statute’s traditional structural safeguards. Framed this way, the central question is whether continued reliance on bespoke exemptive orders is the appropriate regulatory form for a market that has moved well beyond experimentation. By situating these products within the broader evolution of fund regulation—and by comparing their trajectory to the early institutional phase of exchange-traded funds—this Article argues that the ad hoc relief on which these funds rely, along with the investor-eligibility restrictions that frequently accompany it, functions as transitional scaffolding rather than a durable endpoint. The SEC should instead adopt generally applicable rules that more transparently balance complexity, liquidity risk, and investor access.
Recommended Citation
Anita K. Krug,
Modular Securities Regulation,
95 U. Cin. L. Rev.
90
(2026)
Available at: https://scholarship.law.uc.edu/uclr/vol95/iss1/3