SEC Issues No-Action Letter Regarding Definition of ‘Knowledgeable Employee’

The Securities and Exchange Commission Division of Investment Management issued updated guidance regarding the definition of “knowledgeable employees” under Rule 3c-5 of the 1940 Investment Company Act (Managed Funds Ass’n, SEC No-Action Letter, avail. 2/6/14).

In a release also on Feb. 6, Managed Funds Association (MFA) Executive Vice President Stuart Kaswell said the relief allows “more employees of fund managers to invest in their respective funds” while preserving “important investor protections.” According to MFA, it worked with the SEC staff in drafting the no-action letter, which it believes “represents a substantial improvement over the existing guidance” on ...