ICI Welcomes Supreme Court Decision in FS Credit Opportunities Corp. v. Saba

Washington, DC; June 11, 2026—The Investment Company Institute (ICI) welcomes the Supreme Court’s decision in FS Credit Opportunities Corp. et al. v. Saba Capital Master Fund, Ltd., et al., which rightly holds that Section 47(b) of the 1940 Investment Company Act (’40 Act) does not create an implied private right of action.

As we explained in our amicus brief, the ’40 Act makes clear that Congress did not intend to authorize private parties to seek rescission under Section 47(b). Instead, Congress established a framework in which the Securities and Exchange Commission serves as the primary enforcer, complemented by the oversight of independent fund directors. The Act’s limited, well-defined private rights of action confirm that Congress knew how to create such rights within this statute, and courts should not imply their existence elsewhere.

The Court’s decision preserves the ’40 Act’s comprehensive, carefully calibrated framework and avoids the specter of an ‘open season’ back door right of private litigation over alleged violations of the Act’s numerous provisions. Allowing such claims would have risked significant regulatory uncertainty and costly litigation, which would have ultimately harmed fund shareholders.

The Court’s decision today further supports the regulatory system that has protected millions of investors for decades and enabled funds to play a central role in helping Americans secure their financial futures.

Read more on the Supreme Court decision here.