On July 11th, Crowdfund Investor summarized the comments made at a meeting of the SEC’s Investor Advisory Committee, where the principal topic was revising the definition of “accredited investor.” Revisions.
Money Market Funds
On July 10th, Bloomberg summarized the provisions of new money market rules which the SEC is expected to adopt on July 23, 2014. Among other things, the rules would require prime money market funds to adopt a floating net asset value, require redemption fees, and permit temporary withdrawal suspensions. Money Market Funds.
Chair White Provides Update on SEC Developments
On July 10th, SEC Chair Mary Jo White discussed the comments the SEC received after it re-opened the comment period on the SEC’s proposal regarding target date funds. Generally, commenters favored appropriately tailored enhanced disclosure requirements for target date fund marketing materials. A number of commenters expressed concerns that standardized risk measures could potentially confuse or mislead investors, while others supported the proposal citing the potential usefulness of a standardized risk measure. The Department of Labor has also proposed amendments to disclosures to require a glide path illustration for target date funds subject to ERISA. The SEC staff will coordinate with the Department of Labor on their respective initiatives, as appropriate. White Remarks.
Investment Management Director Discusses Proactive Monitoring and Division Guidance
On July 10th, the SEC posted the July 1st, 2014 remarks of Norm Champ, Director, Division of Investment Management. Champ discussed his Division’s efforts at proactive monitoring of industry trends. The Risk and Examinations Office (“REO”) has begun an industry monitoring program to provide ongoing financial analysis of the investment management industry, with a particular focus on strategically important investment advisers and funds. In addition to financial analysis, REO is conducting examinations that gather information from the investment management industry to inform the Division’s policy making. Although REO may conduct its own exams, where practical, REO will join examiners from the Office of Compliance, Inspections and Examinations on their examinations of firms. The staff is also considering ways to improve the usefulness of information it receives about mutual funds and other investment companies. It is undertaking an initiative to develop a recommendation for the SEC to consider possible ways to modernize and streamline the information that funds report to the SEC. Champ also discussed recent guidance issued by the Division regarding summary prospectuses, fund and product names, disclosures related to the use of derivatives, deregistration, and multi-manager funds. Champ Remarks.
On July 9th, the SEC’s Division of Corporation Finance released four charts regarding international corporations and reporting companies. The charts are:
- Number of foreign companies registered and reporting with the SEC;
- Market summary;
- Geographic listing by country of incorporation; and
- Alphabetical listing by company name.
Investment Management Director Discusses Alternative Funds
On July 7th, the SEC posted the June 30, 2014 remarks of Norm Champ, Director, Division of Investment Management. Champ noted how existing investment company staff guidance applies to alternative funds and the Office of Compliance Inspections and Examinations’ recent risk alerts concerning alternative funds. As previously announced, OCIE will be conducting a sweep examination of 15 to 20 alternative mutual fund groups later this year. The sweep will assess the funds’ valuation practices, liquidity, leverage and disclosure. Champ Remarks.
SEC Adds Law Judges
On June 30th, the SEC announced that two new judges and three new attorneys will join the Office of Administrative Law Judges this summer. SEC Press Release.
Office of the Investor Advocate
On June 30th, the SEC’s Office of the Investor Advocate issued its first report on its objectives. In the upcoming year, the Office will focus on equity market structure, investor flight, municipal market reform, cybersecurity, effective disclosure, and elder abuse.
Commissioner Aguilar Discusses Corporate Governance
On June 27th, SEC Commissioner Luis A. Aguilar discussed corporate governance in the area of pension fund management, focusing on shareholder engagement, executive compensation, financial reporting, and boardroom diversity. Aguilar Remarks.