In the Matter of Invesco Funds Group, Inc.

Invesco Funds Group, Inc. (IFG) was the investment adviser to the Invesco family of mutual funds (Invesco funds). Over a multi-year period, IFG permitted certain investors (market timers) to engage in market-timing activities with Invesco fund shares, which included excessive redemptions and exchanges totaling approximately $58 billion. In some cases, the market timers agreed to make longer-term investments in other Invesco funds, which further increased the advisory fees IFG earned on assets under management. The market timers’ frequent trading enabled them to exploit pricing inefficiencies and caused the funds to incur additional costs, both of which were detrimental to the funds’ other shareholders. The market-timing activities allowed by IFG were inconsistent with the Invesco funds’ prospectuses, which were prepared by IFG. The prospectuses discouraged frequent trading and limited the number of exchanges a shareholder could make to four per fund during any 12-month period. The prospectuses also stated that each fund could modify or terminate the exchange policy if the fund determined that doing so would be in the fund’s best interests. IFG permitted the market timers to exchange Invesco fund shares with greater frequency than the limit stated in the prospectuses, even though IFG knew that no determination had been made by the funds that this was in the funds’ best interests and despite IFG’s prior representations to the Invesco funds’ boards of directors that the exchange limit would be strictly enforced. The Securities and Exchange Commission (SEC) brought an administrative proceeding against IFG for violations of §§ 206(1) and (2) of the Investment Advisers Act of 1940 (Advisers Act), §§ 17(d) and 34(b) of the Investment Company Act of 1940 (Company Act), and Rule 17d-1 under the Company Act.