From the Editor...

Regulatory initiatives will be top of the agenda at third- and fourth-quarter board meetings, as independent directors review advisers' liquidity risk management programs and come to grips with the Securities and Exchange Commission's recently proposed exchange-traded funds rule.

The proposed ETF rule is expected to level the playing field among ETFs, but it also will require some boards to climb a steep learning curve and step up their oversight of potential conflicts. Although it's still in the comment period, proposed rule 6c-11 is worth directors' time if they're overseeing ETFs or the adviser with which they work is planning to enter that market soon. The liquidity risk management rule, on the other hand, is finalized and due to be implemented before the end of the year for larger fund groups (mid-2019 for smaller fund groups). Independent directors will be updated this fall on the adviser's progress on its program, even though board approval isn't required until next year.  

Also under "regulatory" on boards' agendas may very well be the SEC's auditor independence rules, which have been well received by the market but which some fund industry groups are hoping will be tweaked somewhat in their focus. Investment Company Institute and Independent Directors Council submitted a comment on the rules calling for further refinement of the' auditor analysis process within the rules' loan provision. 

And in the courts, the excessive fees case against AXA Equitable Life Insurance Co. looks to have finally come to an end after seven years. The U.S. Court of Appeals earlier this month affirmed a lower court's dismissal of the case in August 2016. This came on the heals of a New Jersey judge granting partial summary judgment in a similar case against BlackRock, bolstering the industry's optimism that the plaintiffs' bar may continue backing off this particular approach to suing fund companies. 

For now,

Hillary Jackson, founding editor