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1 – 2 of 2Brenden Carroll, Mark Perlow, Christine Ayako Schleppegrell and Sam Scarritt-Selman
To explain the SEC’s Share Class Selection Disclosure Initiative (SCSD Initiative), the purpose it seeks to serve, the results it has generated, and its broader implications for…
Abstract
Purpose
To explain the SEC’s Share Class Selection Disclosure Initiative (SCSD Initiative), the purpose it seeks to serve, the results it has generated, and its broader implications for the asset management industry.
Design/methodology/approach
Explains the newly announced results of the SEC’s Share Class Selection Disclosure Initiative. Provides background on the principles underlying the initiative, the mechanics by which the initiative’s self-reporting program operated, and industry reaction to the initiative. Analyzes the results the initiative generated, in terms of both aggregate disgorgement and the terms of settlement offered to self-reporting advisers. Draws conclusions and provides key takeaways.
Findings
Although the terms of the actual settlements were consistent with the framework of standardized settlement terms set forth in the SCSD Initiative, whether the standardized terms of settlement offered under the SCSD Initiative ultimately will be viewed as favorable will depend in large part upon how the SEC continues to treat advisers that did not self-report.
Originality/value
Expert analysis from experienced lawyers in the mutual fund and investment advisory industries.
Details
Keywords
This paper aims to explain the U.S. Securities and Exchange Commission’s (SEC’s) recent Share Class Selection Disclosure (SCSD) Initiative, which offers potentially favorable…
Abstract
Purpose
This paper aims to explain the U.S. Securities and Exchange Commission’s (SEC’s) recent Share Class Selection Disclosure (SCSD) Initiative, which offers potentially favorable settlement terms to investment advisers who self-report to the SEC’s Enforcement Division violations of the federal securities laws relating to certain mutual fund share class selection issues and to discuss factors for consideration by investment advisers regarding their possible participation in this initiative.
Design/methodology/approach
This paper discusses the conditions and terms of the SEC’s SCSD Initiative, the SEC’s focus on conflicts of interest associated with mutual fund share class selection, the applicable law, the complex nature of these issues and the factors that investment advisers should consider in determining whether to participate in the initiative.
Findings
The assessment of the facts and the evaluation and analysis of the issues may be both time-consuming and complex. Firms need to carefully consider whether the potential benefits of self-reporting outweigh any possible downsides, including the potential collateral consequences that an SEC enforcement action may have on their business operations.
Originality/value
This paper contains valuable information about a recent SEC Enforcement Initiative and provides practical guidance from experienced securities counsel.
Details