The Securities and Exchange Commission plans to issue a fiduciary rule proposal in April 2017, putting further doubt into whether the agency will actually come out with such a rulemaking. The agency is, however, also looking at fixes to mutual fund prospectuses and scrutinizing exchange-traded funds, SEC Chairwoman Mary Jo White said Friday.
The securities regulator noted the April 2017 date in a Wednesday regulatory agenda filing with the Office of Management and Budget. But the regulatory dates filed are just projected dates. Some industry officials opine that a fiduciary rule will never be issued by the SEC, despite White’s insistence that such a rule is a priority for her. Others, however, maintain that the agency is further along in a fiduciary rulemaking than observers think.
The agency’s regulatory agenda also states that a proposal to require advisors receive a third-party audit won’t be coming until next April either. But Skip Schweiss, managing director of advocacy at TD Ameritrade Institutional, says that such a proposal should be out in the next 60 days, with perhaps a “targeted to be finalized” date of April 2017.
Meanwhile, the Senate Banking Committee approved by voice vote Thursday the two new SEC commissioner nominees, Lisa Fairfax and Hester Peirce.
During remarks at the Investment Company Institute annual conference in Washington Friday, White said that while the agency has already taken “significant steps to modernize our registered fund disclosure regime, including adopting the summary prospectus to better focus mutual fund investors on the fees and risks of a fund,” more is needed.
As the agency looks forward “past 2016,” White said that she has directed the agency’s Investment Management Division to undertake a “disclosure effectiveness initiative” to consider ways to improve the form, content and delivery of funds’ disclosures.
“Staff is in the early stages of prioritizing areas of focus, but I expect they will include ways to leverage advances in technology to improve the presentation and delivery of disclosures and ways to enhance disclosure about fund strategies, investments, risks and fees,” White said.
In particular, “a fund’s disclosure of fees and expenses plays a pivotal role in informing investors about their fund investments,” she continued. The staff will, for example, consider whether improvements could be made to the fee table to facilitate investor comprehension of the information it presents and whether the most helpful information is required.
“There continues to be concern about whether all of the information in a prospectus or statement of additional information continues to be necessary or helpful to investors,” White said. “The summary prospectus has helped, but the staff is considering whether further improvements could be made.”