Fund Seeks Relief on In-Person Approvals of Sub-Advisers

The SEC's IM Division appears ready to approve another request for a 1940 Act exemption that would permit a fund board to approve new sub-advisory agreements and material amendments to existing sub-advisory agreements without complying with the in-person meeting requirement of Section 15(c) of the 1940 Act. The Columbia Funds requested the exemption last May with subsequent updates to the application. The funds agreed that if the SEC were to grant the relief, the following conditions would apply:

• The independent trustees will approve a sub-adviser change at a non-in-person meeting in which board members may participate by any means of communication that allows those board members participating to hear each other simultaneously during the meeting.
• Management will represent that the materials provided to the board for the non in-person meeting include the same information the Board would have received if a sub-adviser change were sought at an in-person Board meeting.
• The notice of the non-in-person meeting will explain the need for considering the sub-adviser change at a non-in-person meeting. Once notice of the non-in-person meeting to consider a sub-adviser change is sent, board members will be given the opportunity to object to considering the sub-adviser change at a non-in-person board meeting. If a board member requests that the sub-adviser change be considered in-person, the board will consider the sub-adviser change at an in-person meeting, unless such request is rescinded.
• A sub-advised series’ ability to rely on the requested relief will be disclosed in the sub-advised series’ registration statement.
• In the event that the Commission adopts a rule under the 1940 Act providing substantially similar relief to that in the order requested in the Application, the requested order will expire on the effective date of that rule.