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Regulation and Compliance > Federal Regulation > SEC

Fund Fee Disclosure Is Topic of First SEC Evidence Summit

By Melanie Waddell

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The Securities and Exchange Commission’s Office of the Investor Advocate’s first Evidence Summit, to be held Friday, will explore ways to improve the disclosure of mutual fund fees and costs, as recommended by the agency’s Investor Advisory Committee, SEC Acting Chairman Michael Piwowar noted Thursday.

SEC Investor Advocate Rick Fleming said Feb. 24 that his office is launching the Policy Oriented Stakeholder and Investor Testing for Innovative and Effective Regulation (POSITIER) initiative, which will utilize surveys, focus group tests and other tools to better assess investor needs as well as the efficacy of competing rules.

Piwowar noted during his Thursday comments at the Investor Advisory Committee meeting at SEC headquarters in Washington that the “IAC’s recommendations have been an invaluable source of insight and have greatly contributed to the SEC’s work in recent months,” including the proposed rule amendments issued by the commission on March 1 to improve investor protection and enhance transparency in the municipal securities market. 

Damon Silvers, director of policy and special counsel at AFL-CIO, and an IAC member, queried Piwowar at the Thursday meeting about how the agency is handling President Donald Trump’s federal hiring freeze.

“We are subject to the hiring freeze and that’s already having an effect,” Piwowar responded. The freeze “affects our budget,” and with the “new administration coming in trying to find the right people to talk to takes time.”

The agency is “talking with OMB and the appropriating committees” in Congress, and has “started having various meetings with staff about the various scenarios,” Piwowar added. “We are doing the best we can.”

Brian Scholl, the principal economic advisor in the investor advocate’s office, said at the Thursday IAC meeting that the POSITIER initiative will focus on four areas:

  1. Retail disclosure effectiveness;
  2. Investor perception;
  3. Retail proxy votes; and
  4. Corporate disclosure effectiveness.

SEC Commissioner Kara Stein noted at the meeting that as investors’ advocate, the agency must “continually ensure that we are in touch with the modern investor. We must understand how today’s investors interact with our increasingly complex markets. We need to continuously strive to conduct outreach and use technology in order to identify gaps in investor protection, which may include, for example, gaps in investor financial literacy. In order to foster informed engagement by all investors, we need data, research and analysis.”

Added Stein: “We can and should be providing information to today’s investor in a variety of formats based on data, which can hopefully help us discern how information is best provided to a particular investor.”

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