Forum News Feed

September 21, 2023

Yesterday, the Securities and Exchange Commission by a vote of 4-1 advanced a final rule on Investment Company Names. The rule, originally proposed in May 2022, expands the number of funds that must comply with the Names Rule’s requirement to adopt policies to invest at least 80 percent of their assets in alignment with the fund’s chosen name, updates the rule’s notice requirements, and establishes recordkeeping requirements.

September 20, 2023

Dechert plans to host the firm’s California Investment Management Symposia which will highlight the intersection of rapidly evolving market and technological developments with the adverse legal and regulatory environment for investment advisers, fund managers, and fintech firms.

September 19, 2023

A group of bipartisan members of the U.S. House of Representatives sent a letter to Securities and Exchange Commission (SEC) Chair Gary Gensler voicing their opposition to the Commission’s open-end fund liquidity, swing pricing, and hard close proposal. The letter notes, “The SEC has not adequately identified a market failure, or a significant market threat, that this proposal would address.”

September 18, 2023

Morgan Lewis plans to host a webinar titled, “Registered Funds Trends and Developments Quarter in Review.” This series of webinars focuses on the latest trends and developments impacting funds regulated by the Investment Company Act of 1940.

September 14, 2023

According to a recent client alert from Ropes & Gray, these reforms include several quarterly reporting requirements with respect to performance and fees and expenses, increased transparency regarding side letters and other “preferential treatment” for fund investors, prohibitions on certain liquidity rights and information sharing with fund investors, and limitations on the ability of fund managers to obtain reimbursement from private funds for costs associated with government investigations. In response to the final rule and new requirements, on September 1, an industry coalition comprised of trade groups representing the hedge fund, private equity, and venture capital firms filed a lawsuit in the United States Court of Appeals for the Fifth Circuit against the SEC challenging the final rule.

September 13, 2023

The outlook highlights several important items that Congress must address, many before September 30. This includes passing all twelve appropriations bills in order to avoid a government shutdown on September 30, reauthorizing the National Defense Authorization Act, the Federal Aviation Administration’s authorization, as well as passing a Farm bill and addressing the National Flood Insurance Program reauthorization.

September 12, 2023

The Mutual Fund Directors Forum plans to host a webinar with Professor Scott D. Stewart from the S.C. Johnson College of Business at Cornell University entitled, “Improving Equity Fund Alpha Estimates.” Professor Stewart’s research has shown that supplementing traditional alpha estimate models with a second size factor significantly improves statistical fit and yields new fund rankings.

September 11, 2023

The Mutual Fund Directors Forum and Dechert plan to host a webinar entitled, “Navigating the Recent SEC Rulemakings: Money Market Fund Reforms.” The program will review the recently finalized amendments and discuss the impact on the money market fund industry and, particularly, the boards of directors of money market funds.

September 7, 2023

The program will focus on the legal and ethical risks, mitigation, and best practices to consider across the financial services space as the industry leans into generative AI technology.

September 6, 2023

Tomorrow, September 7 at 2:00pm ET the Mutual Fund Directors Forum and members of EY’s Asset Management practice will discuss Regulated Investment Company year-end shareholder reporting and provide an overview of areas of risk in RIC taxation.

September 5, 2023

Ernst & Young recently published a paper titled, “Four Lessons for Boards in Overseeing Emerging Technology” that highlights the need for boards to understand the potential risks and unintended consequences of technological innovation. The paper discusses the need for boards to be curious about emerging technology, be hands-on, embrace innovation without being reckless, and be inclusive and responsible when implementing new technologies.

August 31, 2023

Last October, the Mutual Fund Directors Forum published a four-part series on the board recruitment process highlighting the use of executive search firms, alternative candidate search tools, succession planning, building personal networks, and general questions to consider when looking to fill a vacancy.

August 30, 2023

Last May, the Commission announced charges against Pinnacle Advisors LLC for “aiding and abetting Liquidity Rule violations by a mutual fund it advised and whose Liquidity Risk Management Program it administered.” In July, Pinnacle Advisors filed a motion to dismiss claiming the Commission’s accusation was “an exercise of government overreach.” The Commission responded to Pinnacle’s motion to dismiss countering that the firm received fair notice regarding the application of the seven-year-old liquidity rule and that the rule is not “impermissibly vague.”

August 29, 2023

This week, the Forum News Feed will highlight popular posts over the last few months. We will return with new content beginning on Tuesday, September 5. In April, Securities and Exchange Commission Chair Gary Gensler testified before members of the House Financial Services Committee as part of the Committee’s oversight process. Many members of the Committee noted the pace of rulemaking and the short comment periods are making it difficult for market participants to keep up. Additionally, a few Members of Congress pushed back against the Commission’s open-end fund proposal which would mandate swing pricing, impose a hard close, and change liquidity management provisions for funds.

August 24, 2023

ACA Foreside discusses the process of launching and distributing an exchange traded fund (ETF) in a paper titled, “Building and Distributing an Exchange-Traded Fund from Start to Finish.” The white paper notes potential benefits of using the ETF wrapper including trading flexibility, lower costs, and tax benefits.

August 23, 2023

The S&P Global Ratings' press release maintained that while the numerical score would be removed, the analytical explanations “will remain integral to our reports.” According to the statement, the change does not impact “ESG principles criteria or our research and commentary on ESG-related topics, including the influence that ESG factors can have on creditworthiness.”

August 22, 2023

FDIC Chairman Martin Gruenberg noted that “while regional banks may not be as large, complex, and internationally active as the Global Systemically Important Banks – or G-SIBS as they are called – they would pose distinct and significant challenges in resolution that could raise serious financial stability risks.” Gruenberg stated that in response to the common findings, the FDIC and other banking regulators were looking at the capital treatment of unrealized losses, long-term debt requirements, and resolution plans for large regional banks.

August 17, 2023

The report delves into the nuances between traditional passive ETFs as well as newer semi-transparent ETF offerings and details different ways in which semi-transparent ETFs disclose their holdings on a limited basis.

August 16, 2023

The proposal, entitled “Amendments to PCAOB Auditing Standards related to a Company’s Noncompliance with Laws and Regulations” would require, in part, that auditors identify potential areas of the law where noncompliance would impact financial statements, assess risk of material misstatement on financial statements due to noncompliance, and identifying instances where noncompliance may have occurred, among other changes.

August 15, 2023

President Joseph Biden issued the “Executive Order on Addressing United States Investments in Certain National Security Technologies and Products in Countries of Concern” which represents the first step by the Biden administration to curb certain categories of U.S. investment into China. Concurrently with the Executive Order, the U.S. Department of the Treasury released an advance notice of proposed rulemaking which includes 80 specific questions and considerations in defining key aspects of the Order.