Chair White Speaks at 41st Annual Securities Regulation Institute.
On January 27th, SEC Chair Mary Jo White discussed the new analytical tools developed by the SEC. The Quantitative Analytics Unit in the SEC's National Exam Program has developed "NEAT," the National Exam Analytics Tool. NEAT allows SEC examiners to quickly access and analyze large amounts of trading data. Among its many uses, NEAT can search for evidence of potential insider trading and identify signs of front running, window dressing, improper allocations of investment opportunities, and other misconduct. White also addressed SEC enforcement, and the change in the Commission's policy regarding admissions. She said: "As we go forward in 2014, you will see more cases involving admissions. When and how we decide to require admissions will continue to evolve and be subject to further articulation in the cases we bring and as we discuss it publicly." White Remarks.
Commissioner Piwowar on Advancing and Defending the SEC's Core Mission.
On January 27th, SEC Commissioner Michael Piwowar discussed two outside forces threatening the SEC's mission. The first threat is special interests trying to co-opt the SEC's corporate disclosure regime to achieve its own objectives. The second threat is banking regulators trying to impose their bank regulatory construct on SEC-regulated investment firms and investment products. Specifically addressing money market funds, Piwowar believes that more should be done to mitigate the first mover-advantage enjoyed by investors who run during times of heavy redemptions. There also remains a need to provide investors with more timely information about funds' holdings, including the value of those holdings. Piwowar Remarks.
Commissioner Gallagher Addresses Forum for Corporate Directors.
On January 24th, SEC Commissioner Daniel Gallagher discussed the need to revamp the SEC's corporate disclosure system and to reform the proxy advisory industry. Gallagher Remarks.
The SEC will hold an Open Meeting on February 5, 2014. Commissioners will consider whether to approve the 2014 budget of the Public Company Accounting Oversight Board and the related annual accounting support fee for the Board under Section 109 of the Sarbanes-Oxley Act of 2002. Commissioner are also expected to consider whether to adopt rules revising the disclosure, reporting, and offering process for asset-backed securities. The revisions would require asset-backed issuers to provide enhanced disclosures including information for certain asset classes about each asset in the underlying pool in a standardized, tagged format and revise the shelf offering process and eligibility criteria for asset-backed securities. Open Meeting Notice.
On January 30th, Bloomberg reported that the SEC's Investor Advisory Committee will not recommend that the agency test wider price spreads for small stocks. Tick Test.
Investment Advisors and Cyber Security.
On January 30th, Reuters summarized the remarks of Jane Jarcho, National Associate Director of the Investment Adviser/Investment Company examination program in the Office of Compliance Inspections and Examinations. Jarcho discussed OCIE's plans for reviewing the cyber security policies of advisory firms. Reuters quotes Jarcho as saying, "We will be looking at policies on IT training, vendor access and vendor due diligence, and what information you have on any vendors." Cyber Inspections.
Interview with an Enforcement Chief.
On January 29th, the Washington Post published excerpts from its interview of Andrew Ceresney, Director of the SEC's Division of Enforcement. The interview covered a wide-range of subjects including the agency's new policy regarding admissions and the SEC's enforcement focus. Interview.
SEC Wants More Information on ETFs Using Derivatives.
On January 29th, ETF Trends reported the SEC has delayed a decision on whether to permit active exchange traded funds to hold derivatives. ETFs.
On January 28th, the SEC's Office of Compliance Inspections and Examinations issued a Risk Alert on the due diligence processes that investment advisers use when they recommend or place clients' assets in alternative investments such as hedge funds, private equity funds, or funds of private funds. The alert describes current industry trends and practices in advisers' due diligence. The risk alert also notes deficiencies OCIE has found at advisory firms. SEC Press Release. Investment News summarized the remarks of Paul Tolley, CCO of Commonwealth Financial Network, an investment advisor, at the Financial Services Institute's OneVoice Broker-Dealer Conference. Tolley discussed a recent SEC exam of the firm in which the agency looked at Commonwealth's due diligence processes for selling alternative investment products. Exam.
On January 28th, Investment News discussed the interest the SEC and the Financial Industry Regulatory Authority have expressed in IRA rollovers. IRAs.
On January 27th, the Wall Street Journal noted the costs and benefits associated with Regulation NMS and asked whether the regulation itself was to blame for recent trading disruptions. Reg NMS.
Corp Fin Guidance on Unbundling Proxy Votes.
On January 24th, the SEC's Division of Corporation Finance issued Compliance and Disclosure Interpretations regarding Securities Exchange Act Rule 14a-4(a)(3), which concerns the "unbundling" of separate matters that are submitted to a shareholder vote by a company or any other person soliciting proxy authority. The new CDIs may be found at Questions 101.01 through 101.03. CDI.