From the Editor...

November 28, 2016

By Hillary Jackson

From the Editor...


In a move widely expected by the industry, Mary Jo White announced earlier this month that she would leave her post as chairwoman of the Securities and Exchange Commission when President Barack Obama's administration ends on Jan 20. White was appointed by Obama in 2013, assuming office in April of that year, and since her departure announcement has received largely complimentary reviews of her leadership at the agency.


When White leaves in less than two months, the Commission will be looking at three empty seats since Obama's nominees have yet to make any progress toward confirmation. There is no solid indication of who President-elect Donald Trump is considering for the job, but the SEC that will take shape under his administration surely will be more conservative than the Commission that has been in place for some. And there is every indication it will shift its focus away from new rulemaking. 


With this in mind, there is a big question mark hanging over the proposed rule regarding fund us of derivatives. It was published last December, garnered quite a lot of industry comment, and seems unlikely to be finalized before the handover of power. Industry insiders differ on what the proposed rule's fate may be post-White, but most agree that fund boards should stay the course in overseeing their funds and the derivatives use in those portfolios. 


In the meantime, White and her staff have asked the U.S. House Committee on Financial Services for a budget increase for the September-ending fiscal year 2018 to continue efforts put in place during her tenure. Specifically, she requested nearly $500 million more for the next fiscal year.


Regulation was just one topic on the agenda at a Gemini Fund Services-sponsored education summit for independent directors of the administration firm's series trust. Gemini sponsors six series trusts, and the firm invited those directors and some from boards overseeing fund groups administered by Gemini to a day-long session designed to enhance governance and foster relationships. Gemini is the only series trust sponsor conducting such wide-ranging multi-board events, and directors who participated told Fund Board Views that it was a uniquely beneficial experience. 


In the legal realm, the 36(b) case against Hartford Funds went to court this month in New Jersey. It lasted only four days—as was promised by the judge months ago—and closing arguments are scheduled for mid-January. That's not the only case progressing through the legal system, but it is one that's being watched as a potential bellwether. We're continuing to watch this space.


For now,


Hillary Jackson, founding editor, Fund Board Views



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