Earlier this year, the SEC clarified that fund sponsors can delegate much of the responsibility for classifying holdings they oversee and other tasks required to comply with the liquidity rule to subadvisors. A Sept. 10 article in Ignites titled “Subadvisors, Sponsors At Work Hashing Out Liquidity Programs” discusses how subadvised funds face unique challenges in developing a liquidity program, and many sponsors are now in the process of developing programs with their subadvisors. The piece includes insights from investment management partner Paulita Pike. Subadvised funds present particular challenges in developing liquidity programs, Ms. Pike says, “perhaps not so much operational in substance, but in communication and coordination.” Ms. Pike adds that subadvisors and advisors must hash out how willing the subadvisor is to take on responsibility — and potentially liability — for different aspects of a fund’s liquidity program.
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