Compliance

Firms attempting to prepare and strengthen their risk management systems in this rapidly changing regulatory landscape are finding it's a bit like trying to hit a moving target.

NEW YORK -- Most retirement planners agree that retirees should maintain some equity exposure during retirement in order to keep up with inflation and a retirement that could last three decades or longer, but what this level of exposure should be -- and whether or not the government should set some parameters -- is being widely debated.

Massachusetts Secretary of the Commonwealth William F. Galvin is investigating the sales materials of fund companies that sell leveraged exchange-traded funds.

Of course, it cannot be proved that hedge funds contributed to the financial crisis, as the Department of the Treasury said last week. However, it's more than likely that the top-performing hedge fund managers, those earning a staggering $1 billion a year in 2006, 2007 and 2008, were invested in the mortgage-backed and leveraged instruments that brought the economy to its knees.

NEW YORK -- An investors' advocacy group is challenging the Obama Administration and Congress to do more for the needs of average investors.

Brokers who offer advice to investors may be held to the same fiduciary standards as investment advisers if legislation proposed by the Obama Administration is passed by Congress.

hedge funds regulation crisis sec securities and exchange commission

One of President Obama’s proposed financial reforms would require employers that do not offer a 401(k) to automatically enroll their employees into an IRA. If implemented, it would give the biggest boost to the retirement savings industry since the creation of the 401(k) in 1980, enrolling 40 million new investors, and attract more than $100 billion within five years, The Wall Street Journal reports.

Despite the repercussions from the blowup of the Reserve Fund’s Primary Fund, money market funds still have not properly addressed liquidity and credit quality issues, the ratings agencies believe, and as a result they might strengthen their standards, The Wall Street Journal reports.

In the wake of Bernie Madoff's monumental, $60 billion Ponzi scheme, regulators are proposing to increase accounting safeguards by requiring mandatory surprise audit inspections of every investment adviser with custody of client assets.

A new advocacy group aims to tackle the consumer with a media campaign to explain the differences between advisers’ fiduciary standard of care and brokers’ suitability standard. The organization announced its formation yesterday. Calling itself The Committee for the Fiduciary Standard, it plans to launch a month-long campaign at some point in the near future.

Hedge funds appear to be on track to deliver returns of 6% or better in the second quarter, their best quarterly performance since 2000, Merrill Lynch analysts project.

While Fidelity Investments agrees with most of the Securities and Exchange Commission’s proposed changes to money market funds, it doesn’t want to see “radical changes” to the asset class, a spokesman told The Wall Street Journal.

Assets under management are down for nearly all firms due to market depreciation. And making matters worse, most funds have also been hit with steep outflows. According to Strategic Insight, only about 22% of equity mutual funds had inflows for at least four of the last five months of 2008. But a few firms have actually seen positive flows over the past year.

Regulatory leaders are questioning whether changes need to be made to target-date funds after several 2010 funds reported huge losses last year, but mutual fund industry leaders say these concerns are overblown.

Regulators are searching for ways to make money market funds stronger without inadvertently crippling the $3.7 trillion industry, but reaching that delicate balance will require compromises from both sides.

After years of the court system siding with the mutual fund industry on the discrepancy between retail and institutional mutual fund fees, the case that the Supreme Court will hear this fall, Jerry N. Jones et al. v. Harris Associates, might be a watershed one for investors.

The Federal Reserve Thursday extended a number of emergency funding facilities from the end of October until Feb. 1, including an asset-backed facility for money funds, the Asset-Backed Commercial Paper Money Market Mutual Fund Liquidity Facility.Other extended programs are the Commercial Paper Funding Facility, the Primary Dealer Credit Facility and the Term Securities Lending Facility. Along with this, the Fed is extending swap lines with other central banks through Feb. 1, citing the continued strain on many capital markets. "Conditions in financial markets have improved in recent months, but market functioning in many areas remains impaired and seems likely to be strained for some time," the Fed said in a statement.

Hedge funds must reshape themselves to regain investors’ trust and continue to grow, speakers at the Managed Funds Association Forum this week said.

The Securities and Exchange Commission met Wednesday to discuss various changes to money market funds to safeguard them from another “run on the bank” like what happened last September with the Primary Fund.