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Piwowar Remarks on DOL Fiduciary Rule, Directors’ Role at MFDF Policy Conference

Acting SEC Chairman Michael S. Piwowar restated his opposition to the DOL’s Fiduciary rule at the MFDF’s annual Policy Conference in Washington last week, calling the delayed rule “unworkable.” Piwowar remarked that the DOL “had no interest in collaborating with the SEC” in drafting the rule and echoed the brokerage sector’s support for a fiduciary standard written by the SEC. Piwowar also remarked on his tenure as the acting chairman, noting that he saw his role as that of a “caretaker” and an opportunity to achieve bipartisan initiatives. He expressed concern for the “cumulative mandate effects” of recent rules on fund directors and stated that the SEC has been trying to strike the right balance in considering fund directors’ traditional oversight role. He noted that regulatory requirements should not result in directors acting as funds’ “shadow management.”  Piwowar commented on other regulatory initiatives including his hope that a provision on electronic disclosure of fund documents will be revisited and the need for inter-agency conversations and efforts on FinTech regulations.

The SEC’s Anthony S. Kelly, Co-Chief of the Enforcement Division’s Asset Management Unit, also was interviewed at the conference. Kelly discussed recent actions targeting fund directors, noting that regulatory penalties sought against individual directors cannot be indemnified by a third party, including the fund. Kelly also discussed enforcement priorities, including fund share class selections and wrap fee programs.

A panel at the conference also discussed the increasing responsibilities of fund directors and the industry shift from actively managed to passively managed funds.