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Article
Publication date: 18 October 2019

Michael R. Rosella, Vadim Avdeychik and Justin R. Capozzi

This article provides an overview of the US Securities and Exchange Commission’s (SEC) recent approval of a package of rulemakings and interpretations designed to enhance…

Abstract

Purpose

This article provides an overview of the US Securities and Exchange Commission’s (SEC) recent approval of a package of rulemakings and interpretations designed to enhance the quality and transparency of investors’ relationships with investment advisers and broker-dealers.

Design/Methodology/Approach

The article provides legal analysis for and historical context of the requirements of the SEC’s adopted rules, Regulation Best Interest and Form CRS in addition to the two separate interpretations under the Investment Advisers Act of 1940, the Standard of Conduct for Investment Advisers; and the Broker-Dealer Exclusion from the Definition of Investment Adviser.

Findings

The SEC’s adopted regulatory package does not adopt a uniform fiduciary standard for broker-dealers and investment advisers but instead promulgates legal requirements and mandated disclosures in order to conform to the SEC’s perceived expectations for reasonable investors.

Practical implications

Investment advisers and broker-dealers should consult with their legal counsel in assessing how and to what extent the new regulatory package is applicable to them.

Originality/Value

This article provides practical guidance from lawyers who have extensive experience with the Investment Company Act, Investment Advisers Act, and the Securities Acts.

Details

Journal of Investment Compliance, vol. 20 no. 4
Type: Research Article
ISSN: 1528-5812

Keywords

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Article
Publication date: 19 June 2007

Michael R. Rosella and Domenick Pugliese

The purpose of this paper is to assess the history, current use, and possible future of Rule 12b‐1 of the Investment Company Act of 1940.

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Abstract

Purpose

The purpose of this paper is to assess the history, current use, and possible future of Rule 12b‐1 of the Investment Company Act of 1940.

Design/methodology/approach

This paper briefly reviews the history behind the original adoption of Rule 12b‐1, then discusses the ways in which 12b‐1 fees are used today, some of the issues surrounding the Rule, and finally, briefly explores where we might be heading in the future.

Findings

The paper finds that, first adopted in 1980 in an effort to prop up a then ailing industry, Rule 12b‐1 and Rule 12b‐1 fees have been a staple for many mutual funds for almost 30 years. Over this time, the ways in which 12b‐1 fees are used has evolved significantly such that some people now wonder whether the Rule continues to serve the purpose for which it was designed.

Originality/value

The paper provides a comprehensive evaluation of how mutual funds' use of Rule 12b‐1 has changed, what the underlying issues are, and the prospects for reexamination of the Rule.

Details

Journal of Investment Compliance, vol. 8 no. 2
Type: Research Article
ISSN: 1528-5812

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Article
Publication date: 1 July 2006

Michael R. Rosella and Domenick Pugliese

To discuss how product innovations in exchange‐traded funds (ETFs) have blurred the line between passive and active management, and to explore the legal ramifications of…

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771

Abstract

Purpose

To discuss how product innovations in exchange‐traded funds (ETFs) have blurred the line between passive and active management, and to explore the legal ramifications of these developments.

Design/methodology/approach

Describes how ETFs operate and how the ETF marketplace has grown; discusses the use of broad‐based indexes for most ETFs until recently; describes newer ETFs that provide targeted exposure to narrow market segments; and discusses underlying indexes that are based on performance‐based characteristics rather than market segments, along with possible difficulties in making performance‐based criteria widely available to investors.

Findings

Historically the SEC has expressed skepticism over actively managed ETFs because of uncertainty as to whether they can provide the same portfolio transparency and arbitrage opportunity that traditional ETFs can. As “Rule Sets,” or criteria for including companies in performance indexes, become more involved and less objective, the challenge will be to ensure that sufficient arbitrage opportunities exist to ensure pricing efficiency. If that challenge can be met, it may serve as a model for a truly actively managed ETF.

Originality/value

Explains how the new generation of ETFs is coming closer to the line of active management and the legal issues that must be surmounted before truly actively managed ETFs are offered.

Details

Journal of Investment Compliance, vol. 7 no. 3
Type: Research Article
ISSN: 1528-5812

Keywords

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Article
Publication date: 1 October 2006

Michael R. Rosella and Domenick Pugliese

This paper sets out to assess the role of the chief compliance officer (“CCO”), how the CCO performs his/her duties, and how the CCO interacts with the fund's board three…

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278

Abstract

Purpose

This paper sets out to assess the role of the chief compliance officer (“CCO”), how the CCO performs his/her duties, and how the CCO interacts with the fund's board three years after the adoption of Rule 38a‐1 under the Investment Company Act of 1940.

Design/methodology/approach

Reviews the CCO's responsibilities under Rule 38a‐1, discusses how the CCO role has evolved since the rule was promulgated, and focuses on key issues such as oversight versus supervision, the annual review process, risk assessement, testing methodologies, and the annual report to the fund board on the adequacy and operation of the fund's compliance program.

Findings

Properly conducted compliance requires the support of a wide range of the advisory/administrative team with the CCO playing the role of conductor of the orchestra. More and more CCOs seek to distance themselves from approving the day‐to‐day actions of other employees, so they cannot be considered to have assumed supervisory responsibility for those employees. Although a fund is required to perform an annual review of the adequacy of its compliance programs and its Primary Service Providers' compliance programs, most CCOs have found the review process is ongoing and occurs continuously throughout the year. Now that these compliance programs have been in place for two years, more CCOs are devoting time and resources to identify high‐risk areas and to implement transactional, periodic, and forensic testing programs. The CCO annual report has taken many different shapes and sizes, but generally summarizes material changes to the fund's compliance policies and procedures that have already been reported to the board.

Originality/value

A current, practical assessment of the CCO role by expert lawyers who advise funds on their compliance programs.

Details

Journal of Investment Compliance, vol. 7 no. 4
Type: Research Article
ISSN: 1528-5812

Keywords

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Article
Publication date: 1 October 2005

Michael R. Rosella

To explain reporting requirements under Section 13 of the Securities Exchange Act of 1934 (the “Exchange Act”) that must be followed by advisers and brokers who exercise…

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108

Abstract

Purpose

To explain reporting requirements under Section 13 of the Securities Exchange Act of 1934 (the “Exchange Act”) that must be followed by advisers and brokers who exercise investment discretion over accounts that hold exchange‐traded equity securities, and to describe reporting requirements under Section 16 of the Exchange Act on certain persons considered “insiders” of a company that has a class of equity securities registered under Section 12 of the Exchange Act.

Design/methodology/approach

Describes the required reporting of significant acquisition and ownership positions on Schedules 13G and 13D, including the obligations of exempt investors, passive investors, and firms and their control persons; describes the required reporting of equity positions in managed portfolios of more than $100 million on Form 13F; and describes the reporting obligations of “insiders” (directors, officers, and principal stockholders) under Section 16 of the Exchange Act, including the content of Form 3 – Initial Statement of Beneficial Ownership of Securities, Form 4 – Statement of Changes of Beneficial Ownership of Securities, and Form 5 – Annual Statement of Beneficial Ownership of Securities.

Findings

Firms and their control persons managing discretionary accounts that hold more than 5 percent of an SEC‐reporting company's equity securities or manage discretionary accounts with market values of $100 million or more; institutional investment managers who exercise investment discretion over accounts with a fair market value of at least $100 million, and corporate insiders have significant reporting obligations under the Exchange Act.

Originality/value

Provides a clear, detailed reference concerning Section 13 and Section 16 Reporting Requirements.

Details

Journal of Investment Compliance, vol. 6 no. 4
Type: Research Article
ISSN: 1528-5812

Keywords

Content available
Article
Publication date: 1 October 2005

Henry A. Davis

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186

Abstract

Details

Journal of Investment Compliance, vol. 6 no. 4
Type: Research Article
ISSN: 1528-5812

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Article
Publication date: 1 January 1951

WE do not apologize for devoting space this month to the Scottish Government Report on Libraries. It is, as our writers affirm, an important document and many themes for…

Abstract

WE do not apologize for devoting space this month to the Scottish Government Report on Libraries. It is, as our writers affirm, an important document and many themes for debate may emerge from it. If a reading circle of young librarians were formed in any district it could consider this document page by page with much profit. It is, for an official document, interesting in style. It starts many old ideas, it has the verve and certainty which we look for in the amateur rather than the professional writer. To some of its statements, for example its assertion that “libraries have reached or are approaching a temporary limit to their usefulness, because the schools have not yet given adequate training in the use and power of books,” librarians may well ask “why?” in relation to the second part of this statement; and they certainly refuse to admit or believe the first part of it. In fact, the use of libraries in such universal manner is largely the result of the work of modern libraries for children. The librarian teaches children what to read. We have not reached any such limit as is affirmed ; we are indeed only on the margin of our possibilities.

Details

New Library World, vol. 53 no. 14
Type: Research Article
ISSN: 0307-4803

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Book part
Publication date: 3 December 2018

Jan Keane

Abstract

Details

National Identity and Education in Early Twentieth Century Australia
Type: Book
ISBN: 978-1-78769-246-6

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Article
Publication date: 1 May 2009

William Baker

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63

Abstract

Details

Reference Reviews, vol. 23 no. 4
Type: Research Article
ISSN: 0950-4125

Keywords

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Book part
Publication date: 3 December 2018

Jan Keane

Abstract

Details

National Identity and Education in Early Twentieth Century Australia
Type: Book
ISBN: 978-1-78769-246-6

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