Securities and Exchange Commission Chairwoman Mary Jo White said Thursday that the agency will continue this year to consider whether the agency should “subject broker-dealers to a fiduciary standard” and stated that the agency will use funds appropriated under the ‘Cromnibus’ spending bill to hire additional examiners.
Speaking at the Investor Advisory Committee’s first meeting of the new year, White laid out “what lies ahead in 2015,” noting that the agency will also consider this year obtaining “sufficient funding” for investment advisor exams, enhancing the disclosure of risks in target date funds, and completing the SEC’s review of the “accredited investor” definition.
White also reiterated in her Thursday comments the measures SEC staff started developing in December that staff in the Division of Investment Management are developing recommendations for Commission rulemaking to address the “increasingly complex portfolio composition and operations of today’s asset management industry,” which includes requiring advisors to have succession plans.
Said White: Three of the core initiatives would modernize and enhance data reporting for both funds and investment advisors; require registered funds to have controls in place that identify and effectively manage the risks related to the composition of their portfolios, including liquidity and the use of derivatives in the portfolios; and require investment advisors to create transition plans to prepare for a major disruption in their business that could disable them from serving their clients.
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The Department of Labor plans to release the redraft of its rule to amend the definition of fiduciary under the Employee Retirement Income Security Act to the Office of Management and Budget for review any day now.
The agency plans to use the $150 million budget boost that it received under the Cromnibus spending bill that passed in December to hire an additional 72 examiners for investment advisors and investment companies in 2015.