SEC Targets Advisers for More Regulation Including SMA Reporting
SEC Chair Mary Jo White said that the SEC intends to increase regulation of investment advisers through increased reporting, enhanced controls over portfolio composition, and required transition plans in the event of a firm’s demise. Ms. White said the SEC wants to collect more data on fund portfolio composition including derivatives, liquidity and valuation. She said that the SEC also wants to collect more data on separately managed accounts. The SEC is also considering “broad risk management programs” for mutual funds and ETFs to contain leverage and ensure liquidity. She also said that the SEC is “developing a recommendation to require investment advisers to create transition plans to prepare for a major disruption in their business” in order to protect client assets.
OUR TAKE: Chair White lays out the most comprehensive asset management regulation plan since Dodd-Frank. She implies that the SEC will require Form PF-type reporting for separate accounts, which would affect all advisers. It also looks like the SEC will impose significant risk management and reporting obligations on funds and ETFs.