Alert August 17, 2010

SEC Staff Provides No-Action Relief From Adviser and Fund Code of Ethics Reporting Regarding Interests in 529 Plans

The staff of the SEC’s Division of Investment Management (the “Staff”) recently granted no-action relief to the effect that an investment adviser’s code of ethics pursuant to Rule 204A-1 under the Investment Advisers Act of 1940 (the “Advisers Act”) need not require persons subject to the code to report transactions in, or holdings of, any qualified tuition program established pursuant to Section 529 of the Internal Revenue Code (a “529 Plan”), provided neither the investment adviser nor any of its control affiliates manages, distributes, markets, or underwrites the 529 Plan.  The relief also applies to related Advisers Act recordkeeping requirements.  Although not requested to do so, the Staff granted corresponding relief regarding the reporting of 529 Plan transactions and holdings under an investment adviser’s code of ethics adopted pursuant to Rule 17j-1 under the Investment Company Act of 1940.