Experience
Richards, Layton & Finger advises some of the world’s leading public investment funds on the nuances of Delaware law. Our Registered Funds Advisory Group brings together a cross-disciplinary team that works with registered investment companies, business development companies, unit investment trusts, commodity pools, cryptocurrency funds, and other types of investment funds on Delaware-specific matters.
We support outside counsel at Am Law 100 firms and others by offering seasoned, Delaware-specific guidance that complements their federal regulatory work. According to the Investment Company Institute, 59% of all business development companies, 47% of all closed-end funds, and 43% of all open-end funds are domiciled in Delaware1—more than any other state. We have a broad and deep client base. Our firm represented funds associated with over half of the top 50 Sponsors/Advisors appearing in The Stanger Report’s league tables ranked by 2024 sales.
REPRESENTATIVE MATTERS
With decades of experience in fund governance, structuring, statutory trust matters, fiduciary duty, and corporate law, our team advises on:
- Board fiduciary duties and governance (including board presentations and special committee processes)
- Reorganizations, statutory mergers, and conversions
- Common and preferred share offerings, exchange offers, rights offerings, bond offerings, at-the-market offerings, and IPOs
- Fund formations and wind-downs
- Shareholder meeting matters and books-and-records demands
- Defensive and anti-takeover advice
- Litigation, including precedent-setting matters like Hartsel v. Vanguard
- Legal opinions related to share validity
- Advice with respect to dividend declarations and indemnification matters
1 Source: Investment Company Institute. For the most up-to-date figures about the fund industry, please visit www.ici.org/research/stats.
Attorneys
Related Practices
Publications
The 2022 Amendments to the Delaware Statutory Trust Act
July 28, 2022
The Delaware General Assembly recently enacted amendments to the Delaware Statutory Trust Act (the “DSTA”) which will become effective partially on August 1, 2022 and partially on August 1, 2023. The amendments make a variety of changes relating to the nature and operation of Delaware statutory trusts (“DSTs”), including amendments (i) adding business development companies to…
The 2020 Amendments to the Delaware Statutory Trust Act
July 29, 2020
The Delaware General Assembly recently enacted amendments to the Delaware Statutory Trust Act (the “DSTA”) which will become effective August 1, 2020. The amendments make a variety of changes relating to the nature and operation of Delaware statutory trusts (“DSTs”), including amendments (i) clarifying the ability of a DST to enter into contracts between series of…
Like Herding Cats: An Analysis of Common State-Law Shareholder Meeting Questions
The Investment Lawyer | June 2020
For many registered investment companies under the Investment Company Act of 1940 (1940 Act) (which we will refer to generally as funds), persuading retail investors to vote their shares at shareholder meetings can be a challenge. This challenge can be compounded by the somewhat arcane rules relating to shareholder meeting mechanics. This article addresses some common…
A Delaware Perspective on Northstar v. Schwab and Its Implications
October 22, 2015
Northstar Fin. Advisors, Inc. v. Schwab Invs., No. 11-17187 (9th Cir. filed Sept. 14, 2011), has generated considerable apprehension in the mutual fund industry, particularly with respect to its discussion relating to the ability of mutual fund shareholders to bring direct actions against fund board members and investment advisors. With the U.S. Supreme Court’s recent denial…
Amendments to Delaware’s Statutory Trust Legislation Enacted
July 23, 2014
The Delaware General Assembly has recently enacted legislation amending the Delaware Statutory Trust Act. The following is a brief summary of some of the more significant amendments that affect Delaware statutory trusts.
Impact of Delaware Forum-Selection Ruling on Investment Companies
July 17, 2013
A recent Delaware Court of Chancery opinion upholding forum-selection provisions in corporate by-laws against facial challenges should be of interest to registered investment companies organized in Delaware or considering relocating to Delaware.
The Investment Lawyer | August 2012
This article will discuss recent Delaware case law addressing derivative actions involving registered investment companies organized as Delaware statutory trusts.
May 14, 2012
In Protas v. Cavanagh, the Delaware Court of Chancery applied corporate law tests in dismissing direct and derivative actions brought against Black Rock Credit Allocation Income Trust IV, a Delaware statutory trust (“BTZ”), BTZ’s board of trustees and various other parties.
Protecting the Protectors: Indemnification of Trustees of Delaware Statutory Trusts
The Investment Lawyer | July 2011
The board members of registered investment companies play a critical role in protecting the interests of shareholders. In order to encourage the diligent discharge of their duties, the board members of registered investment companies in turn need to be protected. Indemnification and advancement, along with insurance, are key components of the protections available to board members with respect to the discharge of their duties.
The Investment Lawyer | November 2010
In light of recent public discussion with respect to the use of defensive measures by closed-end funds to counteract takeover attempts, this article addresses some of the more common defensive measures that have been adopted by closed-end funds organized as Delaware statutory trusts and the permissibility of such measures under Delaware law.
Delaware Series Trusts – Separate but Not Equal
The Investment Lawyer | February 2009
This article discusses the history of the use of trusts organized in series under the Investment Company Act of 1940 (the 1940 Act); the series provisions of the Delaware Statutory Trust Act (the DSTA); the common issues and questions that arise as a result of the use of series; and the future of the series concept…
The Investment Lawyer | January 2008
This article highlights the provisions of the Delaware statutory trust likely to be of most interest to investment companies and their advisers (particularly those provisions designed specifically to address the needs of investment companies) as well as provides some practical considerations for the drafting of governing instruments, including with respect to those areas that can prove…