WASHINGTON -- The Securities and Exchange Commission would like to hear from you.
That was the resounding message of a speech delivered Tuesday by Norm Champ, the director of the SEC's Division of Investment Management, the unit of the commission that oversees federally registered investment advisors.
Champ described a concerted effort underway at the SEC to expand the dialogue between the agency and the industry players that it regulates.
"It's essential that we all work together -- the industry and the regulators -- to protect investors," Champ said in an address here at the Insured Retirement Institute's Government, Legal and Regulatory Conference.
Broadly, he explained that the SEC is seeking to bring itself "more in tune with the investment management industry" as it strives to keep up with the latest trends in product development and advisors' strategies.
That begins with a close scrutiny of the information registered financial entities submit on Form ADV and other filings with the commission, but also aims further to expand outreach to the industry, a monitoring and listening effort that now has a formal structure within the SEC.
"A primary tool in this work to be more aware is our new Risk and Examinations Office," Champ said.
That office has two primary areas of focus, he explained. First, the REO is on the lookout for prevailing trends that are reshaping a given sector within the financial services industry, such as a surge in popularity of a particular class of product or a sudden spike in a firm's market share.
Then REO staffers have also been conducting field visits where they'll drop in on a firm's headquarters to meet with senior leadership, observe its practices and get a sense of the company culture.
"All of this work informs our initiatives and helps us decide where to devote resources and gives us input into the rulemaking. Risk and Exam represents a new area of focus for the division, and I expect Risk and Exam to complement the work of the SEC as a whole," Champ said.
That unit within the division that Champ leads closely coordinates with the SEC's Office of
Compliance Inspections and Examinations, the arm that actually conducts reviews of advisors and other registered entities. In that sense, the REO has a dual role of supporting the SEC's examiners and relaying its findings to the policy-making divisions of the commission.
Champ looks to the REO to build a bridge between the commission and industry, and notes that staffers routinely travel to a firm's office to conduct their meetings, rather than summoning executives to Washington. So far, the REO's visits have been to mutual fund complexes, though Champ suggested that the program could expand. Those efforts, in service of a more productive collaboration with financial service providers, have yielded encouraging, if preliminary, results.
"This communication has given us an effective dialogue with the industry and we very much consider it a two-way communication opportunity so that people can also -- you know, we can hear what's on their minds but they can here what's on ours. We think we'll be better regulators, to the extent we understand the workings of the industry we regulate, and if firms see our willingness to reach out and listen, hopefully they will respond with cooperation and more effective communication," Champ said.
He described the REO's work in the context of a larger, commission-wide push to demystify the SEC's operations and make the agency's inner workings more accessible, a drive that has seen the hiring of an external communications counsel and an overhaul of portions of the website to make information more easily accessible.
"Our goal in all this is to make our positions, our organization, more transparent," he said.
Register or login for access to this item and much more
All On Wall Street content is archived after seven days.
Community members receive:
- All recent and archived articles
- Conference offers and updates
- A full menu of enewsletter options
- Web seminars, white papers, ebooks
Already have an account? Log In
Don't have an account? Register for Free Unlimited Access