From the Editor...
After years of discussions about how mutual funds use derivatives and how such activity should be regulated, the Securities and Exchange Commission this morning took action. The SEC proposed rules that would govern funds' derivatives use and—by Commissioner Luis Aguilar's own admission—add to an already heavy workload for fund directors. This move by the SEC is just a first step, and the final rule when it's adopted could look very different from what was published today. We've got the details of the proposal already, and we'll have industry reaction and analysis next week.
Speaking of analysis, former Division of Investment Management Director Norm Champ takes a hard look at valuation and fund directors' obligations regarding valuation in our latest Viewpoints. It's a subject that was front and center during Champ's tenure at DIM, and he doesn't shy away from criticizing the SEC for adding responsibilities to boards.
In the past couple weeks, we've also brought readers an update on the Hampton v. Pacific Investment Management Company and Northstar Financial Advisors Inc v. Schwab Investments cases (and why boards should be paying attention), a look at MarketWatch columnist Chuck Jaffe's Lump of Coal Awards (part one; we should have part two for you next week), insight into the generational shift occurring on so many boards, news of a new director—the NY Knicks' Stephen Mills—joining Ariel Funds' board, and more. Have a look around the website to make sure you haven't missed anything.
More next week, the last full work week of the year.
Hillary Jackson, founding editor, Fund Board Views