Operating in an industry that is so heavily regulated by various organizations can bring with it many obstacles and frustrations - one of those being the confusion with so many acronyms! We understand the trouble with keeping it all straight and have created the following cheat sheet to help. Obviously, the list is not all-inclusive, but we think it’s a good start. If you have any questions or would like to see something added to the list, don’t hesitate to contact a member of our team.

ACCOUNTING, FINANCIAL REPORTING, AND GENERAL

PCAOB - Public Company Accounting Oversight Board
The PCAOB is a nonprofit corporation established by Congress to oversee the audits of public companies in order to protect the interests of investors and further the public interest in the preparation of informative, accurate and independent audit reports. The PCAOB also oversees the audits of broker-dealers, including compliance reports filed pursuant to federal securities laws, to promote investor protection.

FASB - Financial Accounting Standards Board
The FASB is the designated private sector organization in the U.S. that establishes financial accounting and reporting standards that govern the preparation of financial reports by non-governmental entities.

GAAP - Generally Accepted Accounting Principles & ASC-Accounting Standards Codification
GAAP refer to the standard framework of guidelines for financial accounting used in any given jurisdiction. GAAP includes the rules accountants follow in recording transactions and in the preparation of financial statements.

The Financial Accounting Standards Board Accounting Standards Codification (ASC) is the source of authoritative GAAP recognized by the FASB to be applied to non-governmental entities. The ASC is the result of the FASB reorganizing all U.S. GAAP pronouncements into accounting topics using a consistent structure. ASC also includes relevant U.S. Securities and Exchange Commission (SEC) guidance.

The codification was effective for interim and annual periods ending after September 15, 2009. All existing accounting standards were superseded as described in FASB Statement No. 16; all other accounting literature not included in the ASC is considered non-authoritative.

ASU - Accounting Standards Update
ASUs are amendments to the Accounting Standards Codification. ASUs include a summary of the provisions of the Update, details of the ASC text that were revised, and an explanation of the reasons for the FASB’s decisions.

SAS - Statements on Auditing Standards
Statements on Auditing Standards (SAS) are issued by the Auditing Standards Board (ASB), the senior technical body of the American Institute of Certified Public Accountants (AICPA). The statements provide auditors of non-public companies with guidance on auditing matters applicable to conducting, supervising, and reporting on audits.

When the PCAOB was established, the board adopted the AICPA standards that existed at the time as interim guidance for auditors of public companies, including mutual funds. The board has since superseded several of them with their own PCAOB Auditing Standards.

SSAE - Statements on Standards for Attestation Engagements
SSAE are issued by the AICPA and relate to engagements under which an accountant is attesting to the accuracy or fairness of specific subject matter, but not issuing an audit opinion (e.g. agreed upon procedures, examinations of management assertions, etc.).

CCO - Chief Compliance Officer
A CCO is an officer of a mutual fund whose responsibilities include ensuring that the fund complies with its outside regulatory requirements and internal policies. CCOs also may design and update internal policies to mitigate the risk of violating laws and regulations. Typically, a CCO complies with his or her responsibilities by completing a 38a-1 (see below) annual report and providing updates at board meetings.

NAV - Net Asset Value
NAV is a mutual fund’s net asset value per share. It is calculated daily and represents the difference between the fund’s assets and liabilities, divided by the number of shares outstanding.

CDSC - Contingent Deferred Sales Charge
CDSC is a fee that certain mutual fund investors pay upon redemption of their mutual fund shares within a specified timeframe from their initial purchase. The charge is related to an issuer’s payments for distribution, pursuant to a Rule 12b-1 plan, and is based on a percentage of the lesser of the redemption proceeds or original cost.

INVESTMENT COMPANY RULES AND FILING REQUIREMENTS

Rule 12b-1
12b-1 plans are used by a fund to finance the distribution of their shares. This plan is required to be reviewed annually by the fund’s board of directors or trustees to determine whether to continue or terminate it.

Under a traditional 12b-1 plan, a fund’s distributor may be compensated or reimbursed for its distribution costs or efforts through the following methods:

1. 12b-1 fee, which is payable by the fund based on an annual percentage of the fund’s average net assets.
2. Front end load, which is assessed on shareholders at the time fund shares are purchased.
3. A CDSC imposed directly on redeeming shareholders.

Rule 38a-1 - Compliance Procedures and Practices of Certain Investment Companies
This SEC rule requires each investment company and investment adviser registered with the Commission to 1) adopt and implement written policies and procedures reasonably designed to prevent violation of the federal securities laws, 2) monitor and assess the adequacy of these procedures on at least an annual basis, and 3) designate a CCO to be responsible for administering the policies and procedures. The CCO is then responsible for reporting on compliance related matters with the fund’s board.

19a-1 - Written Statement to Accompany Dividend Payments by Management Companies
It is unlawful for a registered investment company to make a distribution to shareholders from sources other than such company’s:

N-1A - Registration Form
Form N-1A is completed by registered investment companies to register with the SEC under the Investment Company Act of 1940 and to offer its shares under the Securities Act of 1933. Filing of the form includes the fund’s prospectus, Statement of Additional Information (SAI), and other information about the fund, that is intended to assist current and potential shareholders in making decisions about investing in the fund. The information included in a fund’s initial filing of Form N-1A is required to be updated/amended on an annual basis, no later than 120 days after the fund’s fiscal year end.

N-Q - Quarterly Schedule of Portfolio Holdings
Form N-Q is completed by registered investment companies and filed with the SEC no later than 60 days after the close of the first and third fiscal quarters. The form is used to report a fund’s portfolio holdings as of the period end and also should include portfolio-related disclosures.

N-SAR - Semi-Annual Report
Form N-SAR is completed by registered investment companies and filed with the SEC no later than 60 days after the fund’s semi-annual period and fiscal year end. With the filing of the form, funds are required to include certain informational and financial disclosures for the relevant period. On an annual basis, funds also are required to include the auditor’s report on internal control with the filing of Form N-SAR.

N-CSR - Certified Shareholder Report
Form N-CSR is completed by registered investment companies and filed with the SEC no later than 10 days after the fund mails its semi-annual and annual report to shareholders. The form is used to report certain quantitative and qualitative information, including certain information relating to the fund’s compliance with its code of ethics, and is certified (signed) by officers of the fund.

N-PX - Annual Report of Proxy Voting Record
Form N-PX is completed by registered investment companies and filed with the SEC in order to report its proxy voting record for each twelve-month period, ending on June 30 of each year. This report must be submitted no later than August 31st of each year.

The information is provided by Cohen Fund Audit Services and is intended for informational purposes only. You should consult with your legal and other advisors specific to your situation before taking any subsequent action.