TBMA's Technology Committee Commences New Initiative/Seeks Buyside Volunteers

In November 2003, The Bond Market Association published a report that catalogs and describes electronic trading platforms and systems that allow dealers or institutional investors to buy or sell fixed-income products electronically. The information provided in the report has brought great benefits to the industry. Accordingly, The Bond Market Association is beginning a new initiative to broaden the appeal of the information developed in the November 2003 report by including a wider buyside perspective. Buyside involvement in this initiative could lead to opportunities relating to ascertaining more information regarding volume levels in connection with the use of automated trading and processing products.

If your firm is interested in joining other buyside firms in this initiative, please contact Joseph Sack at 646.637.9273.

SEC Publishes Final Rule on Investment Company Governance

On July 27, 2004, the Securities and Exchange Commission put forth a final rule which requires investment companies that rely on certain exemptive rules to adopt certain governance practices. According to the Commission, these rules are designed to address concerns relating to mutual fund governance issues by improving a fund board's ability to protect the interests of the funds and fund shareholders they serve.

The final rule addresses the important role of fund directors and, in particular, independent directors within the fund board, citing the responsibility of those individuals to bring objectivity to the boardroom. The rule also requires that funds relying on any exemptive rule "have a board of directors whose independent directors constitute at least 75 percent of the board". In addition to other requirements, the new rule states that the fund must have an independent chairman, conduct an annual self assessment and have the independent directors meet in a separate session at least once quarterly.

Click here to read the SEC Final Rule on Investment Company Governance.

Important Dates:
Effective Date: September 7, 2004
Compliance Date: January 16, 2006

NOTE: This Weekly Report on Proposed Reforms Affecting Asset Managers is a service of the Technology, Operations and Asset Manager Relations Department of The Bond Market Association. We encourage your input as this communication is designed to promote dialogue among members of the Forum and the Association. Please feel free to contact Joseph Sack, Executive Director of the COO Group of The Asset Managers Forum or Douglas Taggart or Elisa Nuottajarvi of the staff of The Bond Market Association.