On February 6, the staff of the SEC’s Division of Investment Management issued a no-action letter with respect to Rule 3c-5 of the Investment Company Act of 1940 (the Company Act) that represents a substantial improvement over the existing guidance regarding the definition of “knowledgeable employees” thereunder, i.e., persons who are not required to be “qualified purchasers” under Section 3(c)(7) of the Company Act, or to be counted for purposes of the 100 beneficial owner limit under Section 3(c)(1) of the Company Act. Response.