From the Editor...

Another week, another conference. This week, we attended the media-friendly sessions of Mutual Fund Directors Forum's 2016 Policy Conference in Washington, D.C., with the highlight being the opening keynote address from Securities and Exchange Commission Chairman Mary Jo White. White has not spoken directly to or about mutual fund directors before so anticipation of what she'd say was high on the morning of March 29. She didn't disappoint, delivering a speech that touched on all the pertinent issues (business continuity, liquidity risk management, cybersecurity, enforcement) and managed to both praise directors for what they are doing and advise them on what's expected of them. 

The other session open to the press at this year's event was one on liquidity risk management, which primarily was a review of the SEC's rule proposal on the subject and an update on some of the issues fund advisers and boards face in this area. Panelist Sarah Ten Siethoff, assistant director in the Division of Investment Management, said the agency's objective in writing the rule proposal was to "lift up the bottom of the playing field." She explained that during the outreach period before the release, SEC staff found a wide variation in procedure among advisers and fund boards. "We recognize that there are a lot of fund groups out there that are paying a lot of attention [to liquidity risk management], but it's not uniform across the board," she said. "You would not want to have your whole industry tainted by a couple of people playing a little bit aggressively."

As for the board's role, Ten Siethoff reiterated what seems to be becoming the SEC party line: It's one of oversight, not day-to-day management. She declined to speculate on when a final rule would be put before the Commission. "All I can say is Chair White has told us that this is a priority for her." 

This week also marked the deadline for comments on the SEC's proposed rule on fund use of derivatives, and both MFDF and Independent Directors Council weighed in. Both groups called for more clarification on the board's role and responsibilities, maintaining that the language in proposed Rule 18f-4 implies more board involvement than is appropriate.  

In other news, we've got a great Seat at the Table feature with Philip McLoughlin, independent chairman of several Virtus Investment Partners fund board, and an update on the seat vacated by veteran director Virginia Stringer on the Nuveen Funds board. We've also got a new Viewpoints penned by Voltaire Advisors LLP's Ian Blance, in which he explores the SEC's guidance for boards on how they should oversee third-party pricing vendors. 

As always, we welcome feedback on the stories we're writing and issues we're covering. Please feel free to email me at hillary.jackson@fundboardviews.com or call me on 301-384-1877 anytime. 

For now,

Hillary Jackson, founding editor, Fund Board Views