ADI 2018-03 - Filing information statements in connection with multi-manager exemptive relief
April 3, 2018
Many funds today use a so-called “multi-manager structure,” in which a fund’s primary investment adviser selects and oversees one or more subadvisers who, in effect, serve as the day-to-day portfolio managers for the fund. A fund that uses this structure may have received an exemptive order that permits subadvisers to serve pursuant to subadvisory agreements that have been approved by the fund’s board, but not by the fund’s shareholders, subject to a set of protective conditions. One of the conditions imposed in each of these exemptive orders is that, within ninety days of the hiring of any new subadviser, a fund’s investment adviser must provide that fund’s shareholders with an information statement meeting the requirements of Regulation 14C, Schedule 14C, and Item 22 of Schedule 14A under the Securities Exchange Act of 1934 (“Exchange Act”).
Rule 14c-5 under the Exchange Act requires funds to file a preliminary information statement unless the matter is specifically excluded by the rule.[1] While information statements relating to the approval of advisory contracts are not excluded by the rule, the staff will not object if a fund does not file information statements required by multi-manager exemptive relief with the Commission on a preliminary basis. Funds, of course, are required to file the definitive information statement on the EDGAR system consistent with their exemptive order.
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ADI are recurring publications that summarize the staff’s views regarding various requirements of the federal securities laws.
The statements in this ADI represent the views of the Division of Investment Management. This update is not a rule, regulation or statement of the Securities and Exchange Commission. Further, the Commission has neither approved nor disapproved its content. Future changes in rules, regulations, and/or staff no-action and interpretive positions may supersede some or all of the information in a particular ADI.
We hope that this ADI will assist registrants in preparing their filings. We also welcome feedback on this ADI and on any disclosure matters. If you have any questions or feedback, please contact:
Disclosure Review and Accounting Office
Phone: 202.551.6921
Email: IMDRAO@sec.gov
[1] Preliminary information statements are generally required if the information statement relates to “non-routine” matters. Matters not requiring a preliminary information statement generally include the election of directors; the election, approval or ratification of accountant(s); certain shareholder proposals; and the approval or ratification of an equity compensation plans. See rule 14c-5.