Newly-minted Securities and Exchange Commission Chairman Mary Jo White is off and running. Somewhat.

After being sworn in as the regulator's 31st chair on April 10, White made her first public statement that same day at an SEC open meeting.

Her first piece of business? Regulation S-ID, the SEC's Identity Theft Red Flags Rule.

Under this new rule, certain advisors, broker-dealers, and investment companies are required to develop and implement written Identity Theft Prevention Programs. The new rule applies only to entities holding certain transaction accounts such as broker-dealers that offer custodial accounts, registered funds that allow investors to make wire transfers or write checks and investment advisors as well as private fund sponsors that permit direct payments to third parties.

The Identity Theft Program must identify, detect, and respond to red flags, which are defined as any pattern, practice or specific activity that indicates the possible existence of identity theft.

Add another section to your compliance manual, investment advisors.

White, a former prosecutor and defense lawyer, who more than once has been referred to as Attila the Hun by her peers, said: "These rules are a common-sense response to the growing threat of identity theft to all Americans who invest, save, or borrow money. Any person who entrusts money to a financial institution or who receives money on credit can be vulnerable to those who may falsely pose as the individual and divert the money to a third party. The costs to victims can be great, including loss of individuals' money and significant damage to their credit history."

While a noteworthy cause, this was probably not the first, second, or even third issue that mutual fund participants are waiting for chairman White to address. Rather, they're all anxiously waiting for what Chairman White has to say about the hot-button topic of money market fund reform. This was shelved by former chair Mary Schapiro last summer and has been waiting for her formal successor to arrive.

White is scheduled to make her first scheduled speech to the fund industry at the Investment Company Institute's 55th Annual General Membership Meeting at 8 a.m. on Friday, May 3, in Washington, DC. All eyes and ears will be on her like...well, you get the gist.




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