Editor column

Citation

Davis, H.A. and Tricarico Jr, J.A. (2006), "Editor column", Journal of Investment Compliance, Vol. 7 No. 3. https://doi.org/10.1108/joic.2006.31307caa.001

Editor column

This issue of the Journal of Investment Compliance provides useful updates on a variety of current regulatory and compliance topics, including soft dollars, pension investment legislation, anti-money laundering, New York Stock Exchange governance issues, exchange traded funds (ETFs) and outsourcing the compliance function. We start with an detailed analysis by Stuart Kaswell, Alan Rosenblat, and Michael Sherman of the SEC’s July 2006 Interpretive Release on the soft dollar safe harbor, helping to clarify where a money manager may rely on the safe harbor in using soft dollars to purchase brokerage and research services. Then Richard Gilbert, Ian Levin, and Sarah Downie summarize relevant aspects of the recently signed Pension Protection Act of 2006, including a provision that redefines the circumstances under which an entity’s assets are treated as plan assets for ERISA purposes, thus affording ERISA investors more investment opportunities by allowing funds and other investment vehicles a higher investment threshold by ERISA plans; the authors also explain a number of new statutory prohibited transaction exemptions. Then we have two complementary approaches to anti-money laundering, Alan Sorcher bringing us up to date on new implementing rules under the Patriot Act from US Treasury Department Financial Crimes Enforcement Network (FinCEN), Satish Kini reviewing several recent high-profile enforcement actions, and both providing useful lessons learned and recommendations for financial institutions on improving their anti-money laundering programs. Next Michael Rosella and Domenick Pugliese provide us with useful background on the development and rapid growth of exchange-traded funds (ETFs), the increasing variety of underlying indexes, and a trend in recent product innovation toward active management, which may challenge the legal and SEC regulatory framework under which ETFs have historically operated. Then George Kramer and Alan Sorcher raise a number of issues concerning the new regulatory and governance structure proposed by the New York Stock Exchange, particularly regarding conflicts between the commercial interests of the Exchange and its regulatory powers to inhibit potential competitors. Tim Duck, from a UK perspective, concludes this issue of the journal by discussing the advantages and the risks for a firm to consider when deciding whether or not to outsource the compliance function.

Henry A. DavisEditorJames A. Tricarico JrConsulting Editor