Are Your Employees Now “Knowledgeable”? New SEC Guidance for Private Fund Managers
- A recent SEC no-action letter updates guidance on the types of employees who can be deemed “knowledgeable employees” under the private fund provisions of the Investment Company Act.
- The new guidance clarifies that employees who serve a policy-making function (even if as part of a group) may be treated as knowledgeable employees. The new guidance also provides greater flexibility in determining whether an employee contributes materially to the investment activities of the fund.
- Fund sponsors may wish to review their policies and procedures for identifying “Knowledgeable Employees” based on this guidance.