The staff of the U.S. Securities and Exchange Commission’s (“SEC”) Division of Investment Management (“Staff”) on September 12, 2011 issued a no-action letter that provides relief from the “pay-to-play” recordkeeping requirements for investment advisers to registered investment companies.1 As discussed more fully below, the no-action letter was issued after months of discussion with the fund industry regarding the inability of many advisers to fully comply with the recordkeeping requirements, which became effective on September 13, 2011. The no-action letter permits advisers to maintain an “alternative” set of records that will be deemed to comply with the record- keeping requirements. As a result, advisers will no longer be required to rely on fund third-party distributors and other intermediaries to collect information necessary to comply with the recordkeeping requirements.

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