NEW YORK Elizabeth Krentzman, general counsel of the
Krentzman said the two sides need to create a better working relationship in order to find mutually acceptable solutions to pending proposals for point-of-sale disclosure and revenue-sharing arrangements, as well as on issues such as soft dollars and directed-brokerage agreements, among others.
"After all, brokers are the vehicles through which our members purchase a large portion of the securities for their funds portfolios," she said. "In addition, a considerable amount of fund shares are sold through brokers." Krentzman said the ICI also looks forward to working with the
Krentzman further commended the SEC on its "unprecedented series of regulatory reforms impacting mutual funds," especially the soon-to-take-effect compliance mandates. The "far-reaching" new rules, which are set to take effect on Oct. 5, "will have a significant long-term impact on the oversight of fund operations and related compliance activities," she said.
Echoing sentiments of several ICI and industry figures in the past year, Krentzman hammered home the importance of fiduciary responsibility. "In order to sustain the confidence and trust of our investors, the mutual fund industry must dedicate itself to fulfilling its obligations as fiduciaries. A vigorous and successful compliance program is an essential part of this proposition," she said.
Krentzman said the ICI has committed to establishing a committee comprised of chief compliance officers to give them a forum to interact with their peers, share their perspectives and learn more about industry compliance practices.
Furthermore, Krentzman said that the ICI continues to take an active role in the development of regulatory initiatives to modify the structure of the securities markets to ensure a well-regulated, highly competitive and efficient market. It is also examining the SECs proposed Regulation NMS. "We believe the SEC must focus its efforts on the core principles of a national market system: efficiency, competition, price transparency and the direct interaction of investor orders," she said. "We are hopeful that the SEC will seize upon the current debate over market structure as an opportunity to undertake long-overdue reforms, which the Institute has advocated to improve the quality of our markets and which would move us closer to a true national market system."
