In his recent speech at the ICI's December 15, 2008 Securities Law Developments Conference, Andrew J. Donohue, Director of the SEC's Division of Investment Management, took a look back at where the Division had been over the course of the year and discussed some of the Division's accomplishments and lessons learned. He also gave some hints at where the Division may spend some of its energies in the upcoming year.
Among Donohue's list of IM's accomplishments were:
Among Donohue's list of IM's accomplishments were:
- The adoption of the Summary Prospectus. Mr. Donohue stated that he was sure this new document would be a success because it is "a result of a productive collaboration among the Commission, the fund industry and fund investors." He also characterized this rulemaking as the instance when we were finally successful in providing fund investors the key information they need in a user-friendly format, the culmination of many years of effort.
- Money Market Funds. Donohue recounted some of the challenges faced by money market funds during the latter half of this year, and mentioned that one of the priorities of the Division in 2009 would be a review of the money market fund model and its regulatory regime. He expressed a hope that the kind of collaboration between the SEC, industry, and investors that made the Summary Prospectus possible could be employed in crafting more effective money market fund regulation.
- Auction Rate Preferred Securities. The Division's Exemptive Applications Office, along with the Chief Counsel's Office, played a leading role in the development of regulatory actions intended to better enable the closed end fund industry to address the freeze in the auction rate preferred securities market.
- Rule 12b-1 and Recordkeeping Reform. Mr. Donohue admitted his disappointment that the Division was not able to fulfill his plans for rule 12b-1 reform and investment adviser recordkeeping modernization. But he did promise subtantial work on both issues in 2009, in particular with regard to resolving "a fundamental concern about rule 12b-1 — namely that the rule provides for an alternative means of paying a sales load, but those 12b-1 fees are not treated, regulated or disclosed as a sales load."
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