Regulation And Legislation

Adviser, fund groups call on SEC to review rules and ‘give us a breather’

Regulator should assess whether requirements on the books — including for advertising, custody — are working, and just generally slow down, according to advocates for the profession and industry.

Transition at the Securities and Exchange Commission provides an opportunity for the agency to step back and assess existing regulations before moving on to new ones, according to two financial industry groups.
Former SEC Chairwoman Mary Jo White departed last week when President Donald Trump was inaugurated, leaving three open positions on the commissions.
In a blog post Thursday, Karen Barr, president and chief executive of the Investment Adviser Association, noted that SEC Acting Chairman Michael Piwowar has indicated he will not proceed with any remaining Dodd-Frank financial law rulemakings until a new commission is seated.
“This presents an excellent opportunity for the SEC to review the rules on the books — both recent and longstanding — to determine whether they are working as intended, whether they are achieving their goals and whether there are ways of achieving the rules’ objectives in a more efficient or cost-effective manner,” Ms. Barr wrote.
The SEC should take another look at rules on advertising, custody, record keeping and contributions by advisers to political campaigns. The custody rule, for instance, could be streamlined, according to Ms. Barr.
“While the rule is intended to achieve important investor protection goals, it is overly complex — with interpretations of various provisions causing confusion and consternation for advisers who are doing their best to be compliant,” she wrote.
Paul Schott Stevens, president and chief executive of the Investment Company Institute, also would like to see an SEC slowdown.
“My first message to the SEC, for example, would be: Give us a breather, would you?’” Mr. Stevens said in a recent interview.
The agency has approved rules recently on data reporting, liquidity risk and trading for mutual funds, and has proposed regulations on derivatives and business continuity, among others.
The ICI, which represents the fund industry, wrote 38 comment letters to the SEC last year out of a total of 111 that it penned.
“The thicket of rules just sort of counsels giving the regulated industry, the funds and advisers, the breathing space they need to implement these requirements,” Mr. Stevens said.
In a Dec. 12 letter to the Senate Banking Committee, Ms. White suggested several rulemaking items that were ripe for action.
As of now, the commission consists only of Mr. Piwowar, a Republican, and Democrat Kara Stein. They would have to agree in order to propose, finalize or amend a rule.