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Schapiro: Pending IM Reforms Will Move Forward

In her address before the annual SEC Speaks event in Washington, DC last Friday, SEC Chairman Mary Schapiro outlined the reforms at the agency, as well as some of the budgetary and timing challenges the SEC is facing as a result of deadlines in the Dodd-Frank Act.  Despite the SEC's very busy schedule and other challenges, Schapiro did suggest strongly that at least two IM rulemaking proposals will not be overlooked.  

Of course, the rulemaking front last year ranged well beyond market structure issues - and the calendar was quite packed, even before passage of the Dodd-Frank Act.

The list is way too lengthy to recite, but there are a few rules that underscore our focus and direction:

  • First, because of our intense interest in the municipal securities market - we adopted rules that provide market participants with more meaningful and timely information regarding the health of municipal securities. In addition, we adopted rules to curtail pay-to-play practices by investment advisers seeking to manage public pensions. 
  • Second, because we believe dialogue between investors and corporate boards improves accountability - we adopted rules to facilitate the nomination of directors by shareholders. We also revised the e-proxy rules so that additional materials could be provided with the company's notice. And, we issued a concept release on the process through which proxies are distributed and votes are tabulated. 
  • And third, because we believe that investors deserve clear and accurate information from their advisers, we adopted rules requiring advisers to provide clients with brochures that plainly disclose their business practices, fees, conflicts of interests and disciplinary information. As I pledged last year, we also proposed rules to create a more equitable framework for mutual fund marketing fees, known as 12b-1 fees. And we proposed rules to help clarify the meaning of a date in a target date fund's name, as well as enhance information in fund advertising and marketing materials. (emphasis added)

It seems significant that both fund distribution fees (12b-1) and target date disclosure reforms were mentioned in particular, and it suggests that final versions of these pending rulemaking projects may make it to the Commission's consideration within the year.  

The full text of Chairman Schapiro's address is available at: