Proposed SEC Initiatives Addressing Asset Management Advisers

This month the SEC Chair announce three initiatives proposed to address the risks of complex issues in the asset management industry. The broad initiatives include:

  • Enhanced data reporting – This would require standardized reporting for derivatives used by funds and securities lending.
  • Controls on risks in portfolio composition – This is aimed at risks related to liquidity and derivatives and may include updating liquidity standards, disclosure requirements of liquidity risks, or limits on leverage in derivative use.
  • Transition planning and stress testing – This would require large asset managers to adopt living wills/transition plans to protect clients in the event of a disruption in the adviser’s operations in addition to complying with stress testing implemented in the Dodd-Frank Act.

See Jay G. Baris, “SEC to Require Living Wills and Stress-Testing for Investment Advisers,” JDSupra Business Advisor (December 15, 2014).

Posted by Ryan Moore, Associate Editor, Wealth Strategies Journal