ICI Viewpoints

The 2023 Investment Management Conference (IMC) brought together industry and government leaders to share best practices and better understand compliance and financial regulation. In case you couldn’t attend or just want to recap the action, here is what we learned at the conference.

Swing Pricing is a Major Concern

In November, the SEC’s swing pricing proposal sparked a strong reaction from the fund industry, in part due to the proposed “hard close” which would mean mutual funds couldn’t take orders after 4 p.m. ET. It has garnered criticism from across the industry. Both ICI President & CEO Eric Pan and SEC Commissioner Mark Uyeda spoke in depth about the recent SEC swing pricing proposal. 

 
“You don’t have to tear down a house to fix the squeaky door. We need to think hard about how we approach this. Pay attention to the details and listen,” said Lisa Shea, SVP at Northern Trust on her advice to the SEC on reviewing comments on the swing pricing proposal.

  
Keeping Up with Industry Trends

New and longstanding industry trends are requiring a sophisticated understanding of shareholder needs and compliance requirements. Director of the SEC's Division of Investment Management William Birdthistle delivered remarks focusing on these trends in relation to SEC rulemaking including technological advancement, changing demographics, and rapid growth in the asset management industry. Other panel discussions included:

• The current political landscape and proposals across the nation about ESG.
• Addressing compliance challenges in today’s regulatory environment by tapping into talent and experts across companies.
• Reviewing significant litigation developments and court decisions over the past year and their potential impact on the fund industry.
• How fund companies can implement the SEC’s new tailored shareholder report and form N-PX requirements.
• The growth of collective investment trusts (CITs) and what’s behind this trend.
• Addressing the SEC’s call for industry to submit comments on the proposed market structure and related disclosure rules.

Regulatory Challenges Ahead

A major theme throughout the conference was how industry participants can effectively navigate  financial regulations. ICI General Counsel Susan Olson led a discussion on how companies can keep up with the growing list of proposals and final rules coming out of the SEC. Additionally, a panel of former Directors of the SEC’s Division of Investment Management covered practical implications of regulatory challenges facing the investment management industry.

Commissioner Uyeda also noted the trend, calling for a holistic approach that addresses the cumulative nature of the SEC’s proposals, criticizing the current approach where each analysis “only considers the costs and benefits of each proposal in isolation, asking the commenters to weigh in on any overlap.”