What Is SEC Form 485A24E?

The term SEC Form 485A24E refers to a registration statement that investment companies must file with the Securities and Exchange Commission (SEC) for separate accounts. The form contains post-effective amendments filed pursuant to Rule 485(a) with additional shares under Rule 24e-2. The purpose of the form is to set out the complete details of securities offerings and the investment strategy by an investment company.

Key Takeaways

  • SEC Form 485A24E refers to a registration statement that investment companies must file with the Securities and Exchange Commission for separate accounts.
  • A separate account is a privately managed investment account owned by an investor who wants to manage a pool of individual assets.
  • The SEC requires separate accounts to be registered and regulated with the proper oversight because they may involve particularly risky investment strategies.

Understanding SEC Form 485A24E

A separate account is a privately managed investment account owned by an investor seeking to manage a pool of individual assets. Separate accounts—also called separately managed accounts—are typically opened through a brokerage company, financial advisor, or other financial institution. They may also be held at a bank or opened through an insurance company. High net worth individuals (HNWIs) who want to partner with professional money managers often use them to focus on a single targeted investment strategy. Accounts normally require a minimum balance of $100,000 to open and are often billed under a wrap fee type of arrangement. The investment professional usually has authority over what to trade and how often trades occur.

Investment professionals normally have authority over trading activity in a separate account.

When a separate account is opened, the investment professional files Form 485A24E with the SEC. The agency requires that these types of accounts be registered and regulated with the proper oversight. That's because these accounts may involve particularly risky investment strategies and require complete discretion to be handed over by the account holder to their financial advisor or portfolio manager. SEC Form 485A24E filing cannot be submitted as an Investment Company Act of 1940-only filing. This means the original prospectus must have already been filed.

As noted above, the form outlines securities offerings by an investment company along with its investment strategy. It contains post-effective amendments filed pursuant to Rule 485(a) with additional shares under 24e-2. Amendments in the filing are discussed separately from the contents of the original filing. So if the prospectus for a financial institution's investment strategy changes in a material way, the company must file Form 485A24E with the SEC.

Special Considerations

Rule 485(a) of the Securities Act of 1933 says that a post-effective amendment filed by a registered open-end management investment company or unit investment trust shall become effective on the 60th day after the filing. Rule 24e of the Investment Company Act of 1940 considers a revised prospectus for investment company securities issued under the 1933 act. The revised prospectus must be filed as an amendment to the registration statement under the 1933 act.

SEC Form 485A24E vs. SEC Form 485A24F

Both SEC Forms 485A24E and 485A24F are used to register statements for separate accounts. But Form 485A24F is used to denote amendments filed pursuant to Rule 485(a) under Rule 24f-2. The form outline securities offered by an investment firm, along with a description of funds, associated risks, information about redemption, investment objectives, managers, and other pertinent information. If the investment plan or the list of securities in the separate account changes, it must be amended using an SEC Form 485A24F.