SEC notice covers closed-end funds' bid for more frequent capital gains payouts

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SEC notice on funds' payouts

Highlights

DNP Select Income Fund Inc., multiple Virtus funds, and Duff & Phelps funds filed on March 11, 2026, for SEC exemption to allow more frequent long-term capital gains distributions.
The exemption would enable distributions of long-term capital gains up to 12 times annually for common stock and as specified for preferred stock holders.
Hearing requests on the application must be submitted to the SEC by 5:30 p.m. Eastern time on June 29, 2026, with proof of service required.

Application details and hearing timeline

As reported by the Securities and Exchange Commission, the application seeks an exemption under section 6(c) of the Investment Company Act of 1940 from section 19(b) and rule 19b-1. The relief would allow certain registered closed-end management investment companies to make periodic distributions of long-term capital gains more frequently than the Act currently permits.

The applicants are DNP Select Income Fund Inc., Duff & Phelps Utility and Infrastructure Fund Inc., Virtus Artificial Intelligence & Technology Opportunities Fund, Virtus Diversified Income & Convertible Fund, Virtus Dividend, Interest & Premium Strategy Fund, Virtus Equity & Convertible Income Fund, Duff & Phelps Investment Management Co. and Virtus Investment Advisers, LLC. The filing was submitted on March 11, 2026, and amended on May 13, 2026.

If approved, the order would permit distributions as frequently as 12 times in a taxable year for common stock, and as often as specified by the terms of any preferred stock issued by the investment company. The SEC says an order granting the requested relief will be issued unless the Commission orders a hearing.

Potential impact on fund distribution practices

Interested parties may request a hearing by emailing the SEC's Secretary and serving the applicants with a copy of the request by email, mail or personal delivery. Hearing requests must reach the Commission by 5:30 p.m. Eastern time on June 29, 2026, and must include proof of service on the applicants.

Requests must state the nature of the writer's interest, relevant facts supporting the desirability of a hearing, the reason for the request and the issues being contested. For the closed-end fund sector, the exemption request highlights an effort to gain more flexibility in how long-term capital gains are distributed to shareholders within the current regulatory framework.

Our earlier update on IRS Free File explained that taxpayers who missed the federal deadline could still file their 2025 return at no cost through Oct. 15, helping eligible filers claim unreceived refunds or tax credits. The piece also noted the program’s broad eligibility and its role in supporting accurate, secure online filing for late filers and some non-filers.

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