REGULATORY UPDATES
MUTUAL FUND BOARD GUIDANCE
The SEC released proposed guidance to fund boards regarding investment adviser trading of fund portfolio securities and use of soft dollars on July 30, 2008. This guidance is designed to provide fund directors with a flexible framework in fulfilling their fiduciary responsibility in overseeing the activities of the investment advisers that trade their funds' assets. This is only a proposal and the comment period is open until October 1, 2008.
Click here to read the full CAPIS summary.
Click here read the full report from the SEC.
ADV DISCLOSURE
On March 3, 2008, the SEC released the full text of the proposed amendments to Part 2 of Form ADV. These amendments are only proposals and are not finalized. The SEC accepted comments related to the Form ADV proposed amendments until May 16, 2008.
Click here to view a summary of the SEC release.
Click here to view a summary of the CSA's disclosure guidance.
FORM 5500
The Department of Labor Employee Benefits Security Administration (EBSA), the regulator of ERISA plans, approved the final changes to its disclosure requirements of indirect expenses incurred by investment managers on behalf of their pension fund clients. The new Form 5500 requirements will require investment managers to assure that their Form ADV reporting is accurate given that in the past, some investment managers have incorrectly reported that they did not use soft dollars when in fact they did use commission payments for proprietary research.
Click here to view a summary of the changes.
SEC NO ACTION LETTER
SEC issued a no-action letter in support of client commission arrangements (CCAs), continuing its encouragement of “unbundling” equity research commissions into research and execution components. The latest no-action letter was issued to Lee Pickard of Pickard and Djinis who was writing on behalf of CAPIS to clarify that their form of CCA does not trigger a requirement for non-broker research vendors to register as brokers.
Click here to view the letter.
