What were the takeaways at the Investment Company Institute's 2014 Tax and Accounting Conference in Phoenix last week? We put the spotlight on key regulatory and operation issues impacting the asset management industry.
We asked speakers and attendees of the ICI conference to provide some takeaways on what they learned from the series of panels that were offered.
Gerry Healy, principal, Beacon Consulting Group spoke on panel about service provider oversight.
For me, there were two key themes at the conference.
One is the evolving approach to investing and products and its impact on operations. We've all heard about the rise of passive investing, index investing and multi asset investing. Supporting these products and their reporting and data requirements may compel firms to consider transformational changes and, if applicable, sharpen their oversight models and create closer partnerships with their service providers.
The second theme for me was the sheer volume of regulatory, industry and accounting guidance that fund complexes must address. Not only must tax and accounting professionals make real time judgments on how investments should be accounted for and valued, they need to have the foresight to properly and completely disclose these investments in a way that will withstand subsequent regulatory and audit scrutiny months later. Further, it is a moving target as new products and global rule making inject additional complexity to the process.
Karen Gibian, associate counsel, ICI moderated panel on current tax developments.
The Treasury Department was very focused on making sure that the money market fund tax guidance was made available at the same time as the SEC rule release because they wanted to ensure that there was no confusion or anxiety by funds or fund shareholders as to the possible tax ramifications of the SEC rule change. Thus, they worked closely with the SEC on timing.
The Treasury Department and IRS are keenly interested in comments on the proposed regulations because they note that there may very well be situations or issues that they have not considered.
Nancy Grady, head of fund administration and fund accounting, Northern Trust spoke on panel about service provider oversight.
Attending the ICI conference and listening to industry panelists share their diverse perspectives in dealing with topics such as regulatory change, international investing and valuation was extremely beneficial. The panels had a good mix of representatives from asset management, asset servicing and audit, which reinforced the value of sharing experiences and information.
As a panelist I enjoyed working with firms and individuals that I had not previously dealt with. Each approached our topic of oversight from a different angle, which enabled me to look at the issue with a fresh perspective. The collaboration and support was tremendous.
Ryan Lovin, associate counsel, ICI moderated international investing panel.
European Union reclaims continue to consume large amounts of time and resources for tax and accounting professionals at funds. These reclaims present difficult issues with respect to:
* Evaluating where to file reclaims;
* Presenting the complex issues;
* Managing your service providers;
* Accruing for potential reclaims; and
* Disclosing the potential reclaims;
Finally, issues accessing tax treaty benefits and dealing with local country withholding taxes and capital gains taxes continue to proliferate.
