What changed
The U.S. Securities and Exchange Commission proposed expanding the securities that registered investment funds may trade directly with their affiliates under the Investment Company Act’s cross-trading rule.
The proposal, issued October 9, 2026, would broaden the existing framework. It is not yet a final rule.
Why it matters
Cross-trading lets a registered fund and an affiliated fund transact with each other under specified conditions. Expanding the eligible securities could give fund managers more room to arrange those trades within an affiliated group, instead of relying only on the narrower set allowed today.
That flexibility could affect how funds handle portfolio transactions and manage assets across related vehicles. But the practical reach of the change is still unclear: the proposal does not specify here which additional securities would qualify, what safeguards would apply, or when any amendments might take effect.
The next important step is whether the SEC adopts the amendments and, if so, how it defines the eligible securities and protections around these transactions.
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