Rule 17a-10, Exemption for transactions with certain subadvisory affiliates

Rule 17a-10 (17 CFR 270.17a-10) under the Investment Company Act of 1940 permits (i) a subadviser of a registered investment company (a “fund”) to enter into transactions with funds the subadviser does not advise but that are affiliated persons of a fund that it does advise (e.g., other funds in the fund complex), and (ii) a subadviser (and its affiliated persons) to enter into transactions and arrangements with funds the subadviser does advise, but only with respect to discrete portions of the subadvised fund for which the subadviser does not provide investment advice. The exemptions under Rule 17a-10 are intended to allow a subadviser to enter into such a transaction provided the subadviser does not influence the fund’s investment decision to engage in the transaction. In order to rely on the exemptions in rule 17a-10, funds must include in their subadvisory contracts the provisions required under rule 17a-10(a)(2) to ensure that the subadviser that engages in the transaction does not influence the fund’s investment decisions to engage in the transaction. Section 31(a) of the Investment Company Act of 1940 and rules 31a-1 and 31a-2 thereunder, require investment companies to maintain and preserve records related to investment advisory agreements, including those agreements with subadvisors.

The latest form for Rule 17a-10, Exemption for transactions with certain subadvisory affiliates expires 2028-12-31 and can be found here.