From the Editor...

February 12, 2018

By Hillary Jackson

From the Editor...


There's no question that mutual fund boards have a long list of responsibilities, all put in place with the goal of protecting fund shareholders. But are there too many? Are there some that are outdated? Or duplicative with compliance or other areas within the adviser? Do some push the board too close to the line between oversight and management?


The Division of Investment Management's new director, Dalia Blass, says she's looking at all of this and more. Blass, who rejoined the Securities and Exchange Commission in September, announced at the end of 2017 that she and her staff would review director duties. And in our latest 10 Things, market participants contributed ideas about what should be the focus of the review. The list is not exhaustive, of course, but it does include common themes among the responses we received and from the conversations we've had. 


Also in the regulatory realm, the Office of Compliance Inspections and Examinations released its 2018 exam priorities. OCIE's focus has shifted slightly this year, and industry lawyers said fund boards can take cues from OCIE's areas of focus when organizing their own priorities. 


One area of focus in every market, it seems, is blockchain technology (and, often, cryptocurrencies). Experts maintain that independent fund directors should familiarize themselves with the distributed ledger technology and how their adviser is thinking about potentially using it. "Awareness is key," one industry pro said. 


Finally, we took a look at a piece of proposed legislation that would make it more difficult for the plaintiffs' bar to bring excessive fees cases against the fund industry. Even if it became law, the bill wouldn't change fund directors' fiduciary responsibilities, but it could save the industry the incredible amounts of time and money it takes to resolve these 36(b) cases. Watch this space. 


For now,


Hillary Jackson, founding editor



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