Investment advisers and investment companies that receive and rely on exemptive orders should adopt and implement policies and procedures to ensure "ongoing compliance with each representation and condition," the Securities and Exchange Commission Division of Investment Management staff warned on Friday. Every exchange-traded fund relies on one or more exemptions from the Investment Company Act of 1940, and must continue complying with the conditions in the exemptive order even as conditions change. For example, the SEC approved the application of a Barclays iShares Trust series of ETFs based in part on the representation that "[n]o entity that creates, compiles, sponsors, or maintains" the index the series tracks will be an "affiliated person," as defined in Section 2(a)(3) of the Investment Company Act, or an affiliated person of an affiliated person, or of the fund company or its adviser, promoter or distributor. But when Barclays bought certain Lehman Brothers Holdings units it
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