SEC Proposes Rule Permitting Manager-of-Managers Arrangements

The SEC proposed new Rule 15a-5 under the Investment Company Act of 1940 (the "1940 Act") that would eliminate the need to obtain exemptive relief for "manager-of-managers" arrangements by codifying many of the conditions of manager-of-managers exemptive relief granted by the SEC in the past. (In a manager-of-managers arrangement, one or more sub-advisers manage a fund’s assets subject to the supervision of an investment adviser (the "principal adviser") that may generally hire and fire sub-advisers and materially amend sub-advisory agreements without seeking shareholder approval.) Under the proposed Rule, funds meeting certain conditions would not be required to seek share holder approval of (a) a sub-advisory agreement with a non-affiliated sub-adviser (or any material amendment to that agreement) or (b) (i) any material amendment to a sub-advisory agreement with a wholly-owned subsidiary of the fund’s principal adviser or (ii) any sub-advisory agreement with a wholly-owned