Asked whether all of the problems in the fund industry have been solved with the eight new regulations that the Securities and Exchange Commission has imposed on it since the fund trading scandal erupted, Andrew Donohue, the SEC’s top fund regulator, tells The Wall Street Journal that the Commission will continue to search for infractions.

Opportunities for fraud will continue to exist since the industry has become so complex, “with a lot of relationships among advisers and funds, a lot of different intermediaries, a lot of service providers,” Donohue said.

One area the SEC will continue to scrutinize is revenue sharing. Donohue, the director of the SEC’s division of investment management, said he is particularly interested if the practice extends beyond 401(k)s, service providers and brokerages. “There may be revenue sharing in other areas,” he said. “I’d like a more [detailed] view of that.”

As far as soft dollars are concerned, the SEC is likely to require funds to disclose the practice and for fund boards to take a harder look at it.

As to the second point, the SEC still isn’t sure that fund boards are aware that they are responsible for all aspects of a fund complex, not just trades.

As to the hotly debated question about independent fund board chairman, Donohue hedges, however. If the government doesn’t want to be “second-guessing” fund boards, he said, one approach is to mandate an independent chairman. However, the more than 30 areas that all directors must concern themselves with may be too much of a burden—which “may result in lessening of some regulations,” Donohue said.

Finally, Donohue wants to come up with a two-page fund disclosure document that will make it far easier for investors to assess funds. In the meanwhile, he said, the interactive extensible business reporting language is an important step toward helping investors research funds.

Subscribe Now

Access to premium content including in-depth coverage of mutual funds, hedge funds, 401(K)s, 529 plans, and more.

3-Week Free Trial

Insight and analysis into the management, marketing, operations and technology of the asset management industry.