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MFDF - Mutual Fund Directors Forum - SEC Examination and Enforcement Priorities for 2012

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SEC Examination and Enforcement Priorities for 2012

In several recent public appearances, senior members of the SEC staff have commented on their current examination and enforcement priorities for the asset management industry in 2012.  In a recent investment management alert, Ropes and Gray summarized several common themes that emerged from their remarks, including:

  • Mutual Fund Fees and Board Conduct. The SEC has focused on its publicized initiative with respect to mutual fund board oversight of fees, portfolio valuation and fair value determinations. Notably, the initiative is not about second-guessing fund boards and their business judgment, but rather is focused on ensuring that the board's fee review process is conducted properly.
  • Compliance Concerns. SEC staff appear to be concerned that asset management firms are not committing sufficient resources to compliance functions.
  • Focus on Aberrational Performance. There has been an increase in focus on funds with outlying performance by the SEC staff, including three recent enforcement cases.
  • Use of Social Media. The use and monitoring of social media by investment management firms will be a focus for SEC exam staff in coming periods.