Regulatory reform will take center stage at the Investment Company Institute's 2013 Mutual Funds and Investment Management Conference that starts today in Palm Desert, CA.
At the bit, on opening day: Norm Champ, director of the Division of Investment Management at the Securities and Exchange Commission. Champ, who took over that post from Eileen Rominger on July 5, will kick off the event with its first keynote address.
Champ has been busy hitting the conference circuit, at the start of this year. He is likely to touch on a few issues that are before the SEC, including the ongoing debate on a second set of post-financial crisis changes to money market funds, mutual fund valuations, creating summary prospecti for variable annuities, exemptive relief for exchange-traded fund operators and data collection efforts for mutual funds and investment advisors.
In a speech given before the Investment Advisor Compliance Best Practices Summit 2013 this month, Champ said the SEC is working on three short-term priorities: Potential money market mutual fund reform, identity theft red flag rules, and valuation guidance; as well as five longer-term regulatory initiatives: the review of rules that apply to private fund advisers, a derivatives concept release, an exchange-traded fund rule, a variable annuity summary prospectus, and enhancements to fund disclosures about operations and portfolio holdings.
Champ also said the SEC is working to improve the Division of Investment Management's communications both internally and externally. "One example is that we have created a new position in our Division for an attorney to serve as a communications lead. The communications lead will be reaching out to you, members of the asset management industry, to find out what you would like to hear about," he said.
The SEC is also working to revamp its website including organizing how to provide staff statements and reports topically to make it easier for industry participants to find a particular piece of guidance.
Following Champ's keynote, a group of panelists led by moderator Susan Olson, senior counsel of international affairs at ICI, will discuss how non-U.S. regulatory initiatives are affecting the business and activities of ICI members and how non-U.S. rules and international regulatory developments are influencing the dialogue on U.S. fund regulatory topics.
On the home front, Karrie McMillan, general counsel at ICI, opens the conference Monday, before Champ's address. Later, she will moderate a panel dubbed "U.S. Regulatory Developments Affecting Funds," discussing the growth in the use of social media by investment advisers and the broker-dealers and the application of established marketing rules to new forms of communication within the investment management industry. The panel will also discuss the growing role of intermediaries in mutual fund sales and how they are compensated and the oversight of their activities.
The conference will also have a dedicated panel for alternative mutual funds that bet on the futures space entitled: "You Mean I'm a What?! CPO Registration for Fund Advisers Under CFTC Rule 4.5." Here, panelists led by McMillan will discuss the Commodity Futures Trading Commission's amended CFTC Regulation 4.5, which requires managed futures mutual funds to either limit their use of commodities and comply with certain marketing restrictions or submit to dual regulation by the CFTC and the Securities and Exchange Commission.
In addition, Day One sessions will include a panel on "Lessons for Fund Complexes from Superstorm Sandy," whereby panelists led by Lawrence Kaplan, partner and general counsel of Lord Abbett & Co., will delve into current business continuity plans and how they stack up to natural and unnatural disasters such as the terrorist attacks of 9/11.
Day Two will feature an omnibus accounting session entitled: "The Omnibus Environment: Operational and Oversight Considerations," whereby panelists, led by Kathleen Joaquin, chief industry operations officer at ICI, will tackle, among other items, expansion of omnibus broker sub-accounting and retirement plan recordkeeping arrangements and the need for more robust, efficient tools and resources to monitor and manage intermediary omnibus accounts/relationship.
Just how much transparency is enough in the new world of omnibus accounts? Hopefully, panelists including Stuart Bateman, senior vice president at Franklin Templeton Investments and William Galvin, managing director at Invesco Investment Services, can add some insight to the issue.
The regulatory beat rolls on with a panel entitled: "OCIE and Enforcement: Current Priorities and What They Mean for the Fund Industry," whereby panelists including Carlo di Florio, director of the Office of Compliance Inspections and Examinations at the SEC, will delve into the regulstor's examination priorities for 2013, among other items. The National Examination Program recently published its examination priorities for 2013 including fraud detection and prevention; corporate governance and enterprise risk management; conflicts of interest; and technology.
The panel will also discuss investment advisor's use of social media and preventing and detecting unauthorized trading and the SEC's enforcement actions that led to and stemmed from the financial crisis.
Dr. Mark Meaney, director of ethics and compliance in the Office of the President at the University of California, Berkeley, will end the conference in a session dubbed "Ethical Leadership: From the Board Room to the Mail Room." Attendees will be treated to a talk on why Dr. Meaney thinks good people do bad things using Bernie Madoff as part of his case study.
