Former SEC Commissioner Steve Wallman told staff members of the agency’s Division of Investment Management Friday that they must “tackle” a rule for target-date mutual fund risk disclosure.

While the issue has been debated, such a rule “never seems to be able to get to the finish line,” Wallman said during a panel discussion at the Practising Law Institute’s SEC Speaks conference in Washington.

Wallman’s comment came as the panel discussed the recently passed final rule requiring open-end mutual funds to have a liquidity risk management program.

David Grim, IM’s director, responded that staff is finding it “difficult” to boil down target-date funds’ risks “into one measure; there are a lot of perspectives on what that should be,” adding that the division will “continue to wrestle” with the issue.

Wallman, CEO of FolioInvesting, countered that the effort shouldn’t be confined to “one measure” of risk. “I’m not sure why this has to be in that category; nothing fits into that.”

Michael Spratt, assistant director in the IM division’s Disclosure Review and Accounting Office, noted on the panel that IM reviewed “more than 7,000” new product filings last year, performing a “targeted, risk-based review.”

Included in the filings were novel products like smart-beta ETFs, he noted, with “lots of flows into these.”

Smart-beta ETFs, which he explained track an index where companies are chosen based on some metric other than market capitalization, include “methodologies that can be complex,” so plain-English disclosures around such products are key. “In the area of smart beta, even small differences in methodologies lead to differences in performance.”

As to the guidance issued by SEC staffers Thursday on robo-advisors, which was a result of former SEC Chairwoman Mary Jo White’s creation of a fintech working group last year, Douglas Scheidt, IM’s associate director and chief counsel, noted that the guidance focused on “what was unique to robos but could have implications for other advisors.”

Acting SEC Chairman Michael Piwowar said at the SEC Fintech Forum last year that the agency should take the “lead regulatory role” in the fintech space as “many of the firms pursuing fintech are already SEC registrants, and others are providing services that are squarely within the commission’s oversight, such as investment advice and trading and settlement functionalities.”

— Check out TDFs’ Underlying Funds May Not Meet Plan Sponsors’ IPS Standards on ThinkAdvisor.