More On Legal & Compliance
from The Advisor's Professional Library- Preventing and Dealing with Client Complaints Although the SEC has not provided specific guidance on how client complaints should be handled, a firm’s policies and procedures should provide clear direction how to do so, as neglecting complaints can exacerbate a bad situation.
- Books and Records Rule Thorough and complete books and records enable RIAs to demonstrate that they have fulfilled their fiduciary obligations to clients and complied with applicable rules and regulations.
The SEC voted unanimously Wednesday to seek public comment on a wide range of issues raised by the use of derivatives by mutual funds and other investment companies regulated under the Investment Company Act—including exchange-traded funds (ETFs) and closed-end funds.
The SEC says it is seeking public input through a concept release, and that it will use the comments it receives to help determine whether "regulatory initiatives or guidance is needed that would continue to protect investors and fulfill the purposes underlying the Investment Company Act." Among the issues the SEC said it is concerned about are the potential implications for fund leverage, diversification, exposure to certain securities-related issuers, portfolio concentration and valuation.
“The derivatives markets have undergone significant changes in recent years, and the Commission is taking this opportunity to seek public comment and ensure that our regulatory approach and interpretations under the Investment Company Act remain current, relevant, and consistent with investor protection,” said SEC Chairman Mary Schapiro in announcing the call for comments.
At the end of 2010, registered investment companies held more than $13.1 trillion in assets and more than 40% of all U.S. households owned their shares, the SEC says.
The concept release is a continuation of the SEC’s ongoing review of mutual funds’ use of derivatives announced last year. The concept release requests public input on the issues that the SEC staff has been examining for potential ways to improve the regulation of mutual funds’ use of derivatives.
