Morgan Stanley Bypasses Votes on Subadviser Fees
Published Date: 7/21/2025
Notice
Summary
Morgan Stanley Pathway Funds and Consulting Group Advisory Services want permission to change their subadvisory agreements without asking shareholders every time. They’re also asking to share less info about fees paid to subadvisers. If approved, this could speed up how they manage funds, with a decision expected by mid-August 2025.
Analyzed Economic Effects
2 provisions identified: 0 benefits, 2 costs, 0 mixed.
Change subadvisers without shareholder vote
If the SEC grants the requested exemption, Morgan Stanley Pathway Funds could enter into and materially amend subadvisory agreements with subadvisers without getting shareholder approval by relying on an exemption from section 15(a) of the Investment Company Act. The notice explains hearing requests must be received by 5:30 p.m. on August 11, 2025, and that the Commission will issue an order granting the requested relief unless it orders a hearing.
Reduced disclosure of subadviser fees
The applicants ask for relief from multiple disclosure requirements so they would not have to disclose fees paid to subadvisers under rule 20a-1, Item 19(a)(3) of Form N-1A, Items 22(c)(1)(ii), 22(c)(1)(iii), 22(c)(8), and 22(c)(9) of Schedule 14A, and sections 6-07(2)(a), (b), and (c) of Regulation S-X. If granted, shareholders could receive less information about fees that subadvisers are paid.
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