What Madison Capital Ruling Means For Investment Advisers

Law360 (January 25, 2019, 3:37 PM EST) -- On Dec. 20, 2018, the staff of the Division of Investment Management of the U.S. Securities and Exchange Commission granted conditional no-action relief to Madison Capital under Section 206(4) of the Investment Advisers Act of 1940, as amended, and Rule 206(4)-2, known as the custody rule, thereunder for administrative agents under syndicated loans that also act (or that have affiliates that also act) as investment advisers for pooled investment vehicles, or separately managed accounts that are also lenders under such syndicated loans.

Background

In late 2016 or early 2017, in the course of a routine examination of a registered investment adviser,...

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