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SEC Expands Exemptive Relief for Multi-Manager Funds

The SEC recently issued an order expanding exemptive relief to funds that operate under a multi-manager structure, bringing the regulatory framework governing these funds in line with industry merger and acquisition trends, according to a client alert by lawyers from K&L Gates. The relief allows Carillon Series Trust, and its investment adviser, which is a subsidiary of Raymond James Financial, to enter into new or modified subadvisory agreements with any existing or new subadviser, without shareholder approval, regardless of the level of the subadviser’s affiliation with the adviser. Advisory firms that are partially owned by a fund’s investment adviser were outside the scope of relief granted under previous multi-manager exemptive orders, which applied solely to wholly owned and unaffiliated subadvisers. The recent exemptive relief extends the scope of multi-manager relief to partially owned subadvisers. The extension of multi-manager relief to partially owned subadvisers eliminates a regulatory hurdle that managers consider in connection with a partial acquisition of another firm that will serve as a subadviser to a fund, the lawyers write.

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