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IM Issues in the SEC's Strategic Plan

On October 22, the SEC released its Strategic Plan for 2010-2015 laying out the agency's strategic goals, performance metrics, and resources required to meet those goals.  Chairman Mary L. Schapiro characterized the Strategic Plan as follows:

This Strategic Plan is ambitious. Through the activities described, we are committing ourselves to even stronger enforcement of our securities laws; even more focus on fair and transparent markets; even tougher oversight of those market participants that are registered with the Commission; even higher quality investor-oriented information; and even more effective use of our own resources.

Though the document takes a broad view of the work of the SEC, and how it intends to implement its mission, it contains some relatively specific goals that are enlightening.  Among these goals, the SEC seeks to continue to use its authority to "shape the regulatory framework so that investors are protected through the availability of high-quality disclosure about their investments." Also, the agency plans to refine and expand regulations that promote and strengthen corporate and fund governance. In this regard, notable investment management issues figure into the Commission's five-year agenda.

Fund Distribution

  On page 23 of the report, the Commission lists reforming mutual fund distribution fees amongst its goals:

Address investment company distribution fees: Given the evolution in the investment management industry and in the uses of investment company distribution fees, the SEC plans to reconsider the rule permitting these fees and the factors that fund boards must consider when approving or renewing them.

So, obviously, Rule 12b-1 fees remain firmly on the Commission's agenda.

Money Market Funds

Another broad outcome the Commission lists in the report is to ensure fair and open access to efficient, transparent, and competitive markets.  Listed amongst the more specific goals (on page 26) is the reform of money market mutual funds. 

Implement money market fund reforms: The SEC plans to enhance the regulatory regime for money market mutual funds to better position them to meet demands from investors who want to redeem their shares on a short-term basis.

Given the aspirational nature of the Strategic Plan, it is possible that some of the more specific goals could fall by the wayside.  But, because rule 12b-1 reform and changes to the regulation of money market funds have already been engaged, if not completed, it seems unlikely either will be soon shelved or forgotten.

The full text of the SEC's Strategic Plan 2010-2015 is available at: