Focus on Funds

Asset Managers Respond to Increasing Regulatory Demand for Fund Data

The U.S. Securities and Exchange Commission is among those regulators asking asset managers to provide more data, more frequently. In the May 13, 2016, edition of Focus on Funds, ICI Associate General Counsel Tamara Salmon outlines the changing regulatory approach to data, and how funds are responding.

Transcript

Stephanie Ortbals-Tibbs, ICI Director, Media Relations: U.S. securities regulators continue to race ahead in their effort to collect and understand data from the industry. Here’s a look at the implications, from ICI’s Mutual Funds and Investment Management Conference.

Tamara Salmon, ICI Associate General Counsel: Our members have a tremendous amount of data, but what we’re finding is that they use the data for business purposes, whereas we’re seeing the SEC scrubbing data to look for any kind of regulatory violations or patterns of concern, and then taking action based on what they’re seeing. That’s not the way our members are currently using data, so what we heard through the panel is that our members need to think about looking for potential regulatory concerns in their data—and that’s not something that you can do after the fact. That’s something that you have to build into your systems.

Ortbals-Tibbs: So Tami, what you’re really talking about is a change in mindset, and probably a change in terms of practices around data collections, storage, and the way you output it.

Salmon: Absolutely. One of the things the panel talked about is, in order to start this process you need to make sure that you have good, quality data. So you have to start the process by making sure you’re not only getting data, but that it’s good data, it’s quality data.

Ortbals-Tibbs: So, mindful that the SEC is moving forward on this, what should funds be thinking about in terms of what they might want to do differently?

Salmon: One of the things that we heard from the panel is, even recognizing where your data is, because what you’ll find is [that] our members use data in a variety of forms. So you may have one piece of data that’s used four or five different places in the company. Finding the golden copy of that data, that you can then rely on and then build systems around, should make sure that you’re scrubbing the right data and looking for potential concerns.

Additional Resources

• News release: ICI Supports SEC Rule Proposal to Enhance Fund Reporting and Modernize Shareholder Report Delivery
• ICI comment letter on SEC proposal to modernize fund reporting