From the Editor...
As was widely expected, the Securities and Exchange Commission this month adopted the final rule on liquidity risk management. What was less expected was the SEC's treatment of fund boards in the rule. The agency backed away from language that had been included in last year's proposed rule that many thought imposed inappropriate responsibilities on boards—yet another example of the "responsibility creep" that has upset the fund governance community for the past several years. In this final rule, which carries with it a roughly two-year implementation period, boards are recognized as the overseers they are, and the SEC is garnering praise from various parties for listening to the many comments submitted after the proposal was published in September 2015.
Fund boards, no doubt, will have time carved out at fourth-quarter meetings to discuss the new rule with independent counsel and the adviser, but this is just a first step in the process of implementation. Watch this space as the process evolves and boards tackle the inevitable challenges along the way.
October also has been busy with news of mergers & acquisitions, both in the fund world and in the larger corporate world. When two fund advisers combine, there often is a review of the fund governance structure to determine unnecessary overlap and identify the best, most efficient way forward. In the case of Eaton Vance's acquisition of Calvert Investment Management, there's a little bit of consolidation and a little bit of status quo as Calvert merges its three existing boards into one but EV and Calvert maintain separate boards. Janus Capital Group and Henderson Global Investors, on the other hand, are looking to combine their two boards into a single entity overseeing all the combined firm's funds. Both of these exercises will be interesting to watch.
In other news, long-serving OppenheimerFunds and Neuberger Berman directors look back at decades of fund board service and forward at what might lay ahead for newer directors, the SEC's Buddy Donohue looks at compliance, and BNP Paribas' George Martinez discusses securities lending in our latest Viewpoints. Check it out.
Also, VOTE! Just over a week to go; don't forget to hit the polling station next Tuesday.
Hillary Jackson, founding editor, Fund Board Views