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No Relief for RICs Wishing to Own Commodity-Linked Notes

The preamble to recently issued final regulations states that the IRS will not issue rulings on whether an investment is a "security" for purposes of the regulated investment company (RIC) qualification tests.

In May 2017, the IRS revoked a number of private letter rulings that had concluded that income from a commodity-linked note (CLN) is "good income" for purposes of the RIC qualification tests because the CLNs were "securities" under the 1940 Act.  The revocations indicated that the original rulings were no longer in accord with the IRS' views. 

Key Contacts

Adam Blakemore
T. +44 (0) 20 7170 8697

Linda Z. Swartz
T. +1 212 504 6062

Jon Brose
T. +1 212 504 6376

Andrew Carlon
T. +1 212 504 6378

Mark P. Howe
T. +1 202 862 2236

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