Alternative Pay to Play Recordkeeping Requirements Approved for Advisers to Registered Funds


On September 12, the staff of the SEC’s Division of Investment Management (Staff) issued a no-action letter to the Investment Company Institute (ICI) approving alternativerecordkeeping requirements for investment advisers to registered investment companies under the “pay to play” rules. The no-action relief, which is available only to investment advisers with respect to advisory services rendered to certain registered investment companies, should facilitate compliance with the rules by advisers to exchange-traded funds, mutual funds whose shares are held in omnibus accounts and funds that are otherwise offered through financial intermediaries.

“Pay to Play” Recordkeeping Requirements

In July 2010, the SEC adopted Rule 206(4)-5 (the Pay to Play Rule) under the InvestmentAdvisers Act of 1940, as amended (the Advisers Act) to prohibit certain “pay to play” activities by investment advisers. The Pay to Play Rule generally prohibits advisers from (i)receiving compensation from a government client for two years after the adviser, certain of its employees or its third-party solicitors make contributions to candidates or elected officials of the government client and (ii) soliciting contributions or payments to officials or political parties of a government client or prospective government client and, subjectto certain exceptions, paying third parties to solicit government entities.

Please see full article below for more information.

LOADING PDF: If there are any problems, click here to download the file.

Written by:

Published In:

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Katten Muchin Rosenman LLP | Attorney Advertising

Don't miss a thing! Build a custom news brief:

Read fresh new writing on compliance, cybersecurity, Dodd-Frank, whistleblowers, social media, hiring & firing, patent reform, the NLRB, Obamacare, the SEC…

…or whatever matters the most to you. Follow authors, firms, and topics on JD Supra.

Create your news brief now - it's free and easy »

All the intelligence you need, in one easy email:

Great! Your first step to building an email digest of JD Supra authors and topics. Log in with LinkedIn so we can start sending your digest...

Sign up for your custom alerts now, using LinkedIn ›

* With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name.