SEC Strategic Plan for 2004-2009 with Sights on Technology

On August 5, 2004, the Securities and Exchange Commissioned posted a five-year Strategic Plan on its web site. According to the Commission's press release, the plan identifies the "vision, mission, values, and goals shaping the agency's activities during the next five years…". The SEC highlighted four goals in the plan, namely, to continue to enforce compliance with securities laws, sustain an effective and flexible regulatory environment, encourage and promote informed decision making and maximize the use of SEC resources.

As part of the Strategic Plan (Chapter 2), the SEC cites the recent growth in Electronic Communication Networks and other types of Alternative Trading Systems ("ATSs") and their ability to create new market efficiencies. Over the course of the next five years, the Commission plans to focus its efforts to ensure the safety of these and other electronic markets. The Commission has also called for consolidating redundant applications, centralizing and simplifying data repositories and enhancing data sharing and collaboration within the SEC and with regulatory partners and registrants.

Click here to read the SEC 2004-2009 Strategic Plan

COO Group to Discuss Possible Effects of SEC Hedge Fund Proposal

As reported in the AMF Special Bulletin (July 15, 2004), the Securities and Exchange Commission proposed a rule that, if enacted, would require hedge fund advisers to register under the Investment Advisers Act of 1940. At its next meeting, the AMF COO Group will examine the pros and cons of the proposed hedge fund registration rule. While the aim of the proposal may be to collect general information about hedge funds, the proposal may in fact have a number of unintended consequences that could fundamentally change the hedge fund industry. In its review of the proposed rule, the AMF COO will consider submitting a comment letter to the Securities and Exchange Commission regarding this matter.

Click here to read a related memorandum prepared by Pickard and Djinis, LLP

Comments Relating to the SEC's Proposed Rule on Hedge Fund/Mutual Fund Side-by-Side Management

On March 11, 2004 the Securities and Exchange Commission issued a proposed rule that would require registered investment companies to disclose whether a hedge fund/mutual fund side-by-side management arrangement exists. The proposal also requires a registered management investment company to disclose additional information about its portfolio managers, including compensation structure and ownership of securities in accounts they manage. The Asset Managers Forum COO Group submitted a comment letter that generally supports the Commission's proposed disclosure approach to the question of side-by-side management of hedge funds and mutual funds by portfolio managers, but cites areas where the proposal may have unintended consequences.

Since the close of the comment period, the SEC has been reviewing the comments received before moving ahead with a final decision. Accordingly, the SEC has issued a report that summarizes the industry's comments.

Click here to read the SEC's report on the Side-by-Side Management comments received

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.