4 Key Takeaways from the 2022 PLI Investment Management Program

Brief Introduction

On July 26th, 2022, Practising Law Institute (“PLI”) hosted their annual program for 2022 on Current Issues & Trends in Investment Management. 

The Director of the Division of Investment Management for the SEC, William Birdthistle, was one of the guests for the program. On this program, Mr. Birdthistle shared his insights on the Investment Management industry, and Vigilant has collected 4 key takeaways below.

4 Key Takeaways from the PLI Investment Management Program

1. The SEC’s mission is to protect investors, facilitate capital formation, and maintain fair, orderly, and efficient markets.
2. One of the key focuses for the Division of Investment Management is to help investors better understand fees. Under the Investment Company Act, the Division facilitates the form and content of disclosure, and helps ensure that advisers comply with their fiduciary obligations.
3. The Division has recently proposed several rules, in the interest of protecting investors, which would have the following effects:
   • Private fund advisers would need to provide investors with quarterly statements
   • Private fund advisers would have to receive annual audits
   • Private fund advisers would need to address the possibility for conflicts resulting from adviser-led secondary transactions
   • Private fund advisers would be prohibited from certain practices that the SEC believes are contrary to the public interest
4. Fund shareholders often do not participate in important votes. This creates a scenario where investors’ votes are delegated and used to indirectly influence portfolio companies’ behavior without the knowledge of the investor.
   1. Proxy voting is one of the main areas where the market could aim for increased democratization, such that the markets can more accurately depict the sentiment of American investors rather than large asset managers

Vigilant’s Final Conclusion

It has been a repeatable, but important, trend from the SEC, continuing their mission and key focus on protecting investors, which was reiterated at the Program.

As we see the new Proposed Rule(s) have the potential to take effect, it is important to be following updates on them as they come out.

If you are looking to alleviate the Compliance burden or gain assistance to stay on top of the new rules and regulations, contact us today.

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