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ARCHIVE
2019 Annual Report to Members: ICI’s International Work
By Miriam Bridges
November 21, 2019
Every year, the Investment Company Institute works hard to advance public policies and operational efficiencies that benefit funds and their advisers, directors, and shareholders.
With the industry’s interests bound ever more tightly to global trends, ICI pursues an active international agenda through its international arm, ICI Global. ICI’s international work in 2019 was a period of vigorous effort on a host of issues.
For example, this past year, ICI has
- advocated globally on financial stability by promoting evidence-based approaches to policies affecting regulated funds and their investors;
- helped members prepare for Brexit;
- advocated on crucial EU legislative proposals, such as delegation, sustainable finance, investment firm review, and cross-border distribution;
- informed pension reform efforts in Asia and Europe;
- advocated for the exchange-traded fund (ETF) industry by pushing back against misperceptions about ETFs;
- worked to keep capital markets open across borders;
- worked with fund industry participants around the world to improve operational practices, such as efforts to strengthen cybersecurity, and in the European Union, to streamline practices involving due diligence over distributors; and
- much more.
Find more information about these global issues—and other issues—in ICI’s 2019 Annual Report to Members and at www.iciglobal.org.
Permalink: https://www.ici.org/viewpoints/19_view_ariciglobal
TOPICS: CybersecurityExchange-Traded FundsFinancial MarketsFinancial StabilityGlobalICI GlobalInternationalOperations and TechnologyRetirement Policy
Operations Managers Identify Technology as Key to Future Success
By Ahmed Elghazaly
September 24, 2019
How are asset managers investing in the future? To help answer this question, Accenture conducted a joint study with ICI and released a report highlighting the growing importance of technology to successfully navigate the changing tides in the asset management industry. Whether it’s the cloud, data management, artificial intelligence, or robotic process automation, the study found that the right technology is key to gaining and maintaining an edge in the years ahead.
TOPICS: Operations and Technology
Fund Industry Leaders Encourage Cultural Stability and Willingness to Embrace Change
By Olivia Caverly
May 31, 2019
The mutual fund industry is being driven by change. At this year's General Membership Meeting, the panel “Facing the Future: Leadership Perspectives" highlighted why firms should be encouraging a positive workplace culture, which will enable them to embrace the fast pace of industry change....
TOPICS: GMMOperations and Technology
ICI’s 2018 Annual Report: Letter from the President
By Paul Schott Stevens
December 3, 2018
A version of this letter by ICI President and CEO Paul Schott Stevens was released in the Institute’s 2018 Annual Report.
Fund industry watchers will remember this year as one of important policy developments, including some that have been the subject of years of debate. The Investment Company Institute has been deeply engaged in this wide range of issues, working on both legislative and regulatory fronts to promote advantageous outcomes for regulated funds and their shareholders....
TOPICS: Exchange-Traded FundsFinancial MarketsFund RegulationGlobalIDCOperations and TechnologyRetirement Policy
Improving Operational Efficiency for Interval Funds
By Jeffrey Naylor
October 23, 2018
Fund firms that offer interval funds—a type of closed-end fund that periodically offers to repurchase a portion of its shares—face unique operational challenges. To address these, ICI’s Broker-Dealer Advisory Committee recently launched the Working Group on Interval Funds. The working group plans to publish a comprehensive white paper that will consider new approaches to boosting the operational cohesiveness and efficiency of trade processing for these funds. The paper will include pertinent recommendations that should greatly benefit interval fund investors....
TOPICS: Operations and Technology
How Mutual Funds Service and Protect Shareholders Affected by Disaster
By Joanne Kane
June 26, 2018
Mutual fund shareholders were among the millions of people affected by the numerous natural disasters that affected the United States during 2017. The recent volcanic event in Hawaii is another reminder that disasters—natural or manmade—can strike anytime, anywhere.
As both the summer tornado season and hurricane season get underway, the destruction in Hawaii serve as a reminder that US residents should be prepared for the unexpected—just as mutual funds are prepared to help and protect shareholders affected by disaster....
TOPICS: Operations and Technology
Young Leaders Reflect on Building a Better Business
By Christina Kilroy
June 21, 2018
Emerging leaders in the asset management industry are at the forefront of changes that will fundamentally affect the business—from technology, to client expectations, to how to attract and retain top talent. During a panel at ICI’s Operations and Technology Conference, held concurrently with the 60th annual General Membership Meeting, three such leaders explored how their firms are rethinking legacy processes and moving into the future....
TOPICS: EventsGMMMutual FundOperations and TechnologyShareholder
Artificial Intelligence Offers Opportunity for Funds and Investors
By Miriam Bridges
June 7, 2018
What’s the future of the financial services workforce and artificial intelligence (AI)? Adam Broun, president and COO of Kensho Technologies, believes that AI will help human beings become better at what they do. “We’re not replacing humans yet in any meaningful way; we’re making people more effective and efficient in what they’re doing,” Broun told the audience at ICI’s annual Operations and Technology Conference, held concurrently with the General Membership Meeting on May 22–24 in Washington, DC.
Kicking off the session, Broun described how Kensho developed its “new economy” indexes and how AI comes into play...
TOPICS: EventsGMMOperations and Technology
For Good Cybersecurity, Keep Your Eye on the Basics, Says Fidelity’s Chad Renfro
By Todd Bernhardt
June 5, 2018
The computer breaches and hacks that make headlines are typically massive and complicated, and this can lead to the belief that information security solutions must be similarly complex.
But—as Chad Renfro, head of enterprise cybersecurity at Fidelity Investments, told a capacity audience at ICI’s recent General Membership Meeting—good cybersecurity doesn’t have to be complicated or expensive. Instead, he said, companies that make “strategic, optimized investments in cybersecurity” and that focus on the fundamentals can drastically reduce the amount of risk facing their firm…
Cybersecurity at Work: To Confront Evolving Threats, Flexibility Is Key
By Peter Salmon
October 3, 2017
In the previous installment of this series, I examined a few ways to think about the cyberthreats facing us, and thus to guard against them more effectively. Now, with organizations in every sector of the US economy facing increased pressure to safeguard corporate and client data or suffer potentially ruinous damage to their operations and reputation, it seems that some regulators think they should dictate what’s best for all of us, regardless of individual firm circumstances.
TOPICS: CybersecurityFund RegulationOperations and Technology
Practical Use of RPR: Solving Oversight Issues in the Retirement Market
By John Randall
August 14, 2017
In this post, the second in a series on how to enchance operational efficiency using existing tools and practices, we look at a real-life example of Retirement Plan Reporting (RPR) in use by brokerage firm Edward Jones.
TOPICS: Mutual FundOperations and Technology
Inside SID: It’s All About the Rules
By John Randall
July 12, 2017
One of the benefits of mutual funds is that they can be designed to meet the specific needs of investors’ purchasing preferences. However, this same flexibility to tailor a product can present challenges, because it results in a wide variety of operational rules.
A Tech-Enabled Future—and Present—for Investment Advice
By Rob Elson
May 30, 2017
The future of investment advice will lie at the intersection of technology and humanity, said panelists at ICI’s 2017 General Membership Meeting. But those panelists—Eli Broverman, cofounder of Betterment; Kelly Coffey, CEO at JP Morgan’s US Private Bank; and Ben Huneke, head of investment solutions at Morgan Stanley Wealth Management—offered differing views on how much of a role people will play.
TOPICS: CybersecurityEventsFund RegulationGMMOperations and Technology
Cybersecurity at Work: I Know What You Know!
Peter Salmon
May 26, 2017
Part of a series of ICI Viewpoints covering cybersecurity issues.
In the previous installment of this series I mentioned that this post would address steps that you should take if your computer is hacked. Well, in light of the WannaCry/WannaCrypt ransomware outbreak, it seems appropriate to address not only what to do, but how to think about the threats facing us.
TOPICS: CybersecurityOperations and Technology
Solving for Data Transparency in the Retirement World
By John Randall
May 19, 2017
First in a series of ICI Viewpoints posts focusing on how to enhance operational efficiency using existing tools and practices.
One of the most important functions performed by ICI involves its role in bringing together members, who participate in a wide array of standing and advisory committees that focus on initiatives affecting the fund industry as well as the broader financial markets. This series will focus on the work of the operations and distribution advisory committees
Cybersecurity at Work: Keeping Secure When Away from the Office
By Peter Salmon
February 17, 2017
Part of a series of ICI Viewpoints covering cybersecurity issues.
In the previous installment of this series, we discussed the risks associated with information sharing. One aspect we did not touch on is the inadvertent sharing of information, or data, when traveling for business or pleasure. For example, anyone who has flown lately can clearly observe that planes are full with business travelers, often made obvious by their black ballistic-nylon laptop bags.
TOPICS: CybersecurityOperations and Technology
Investor Protection Priorities for the New Year
By David Blass
December 12, 2016
The following ICI Viewpoints is adapted from a presentation that ICI General Counsel David Blass gave to the Investor Advisory Committee of the US Securities and Exchange Commission on December 8, 2016. Visit this page to read the entire presentation.
If I were to poll ICI members about next year’s priorities, I am sure we would receive consistent feedback: give us an opportunity to implement all the rules that have been imposed on us. New rules from the Securities and Exchange Commission (SEC) covering data reporting, swing pricing, and liquidity risk management will require huge expenditures and years of work to implement fully. And they were adopted in the aftermath of two rounds of money market fund reform, as well as many other rules applicable to the fund industry adopted by other regulatory agencies.
TOPICS: Financial MarketsFinancial StabilityFund RegulationOperations and TechnologyShareholder
Money Market Fund Reforms Combine with Bank Regulations to Boost Interest Rates
By Sean Collins
September 28, 2016
As detailed in the previous ICI Viewpoints in this series, the Securities and Exchange Commission’s (SEC) new rules for money market funds induced a drop in the assets of prime and tax-exempt money market funds of $910 billion since January 2015 and a roughly comparable $872 billion rise in the assets of government money market funds.
TOPICS: Financial MarketsFund RegulationMoney Market FundsMutual FundOperations and Technology
As Money Market Fund Investors Adjust, Funds Have Managed Flows
By Sean Collins
September 27, 2016
The Securities and Exchange Commission’s new rules for money market funds, which must be fully implemented by October 14, largely center around two key reforms.
TOPICS: Financial MarketsFund RegulationMoney Market FundsMutual FundOperations and Technology
For Money Market Funds, Massive Preparation Has Paid Off in Smooth Transition
By Marty Burns
September 26, 2016
First in a series on money market funds.
By October 14, the money market fund industry must fully implement the 2014 money market fund reforms passed by the Securities and Exchange Commission (SEC), cementing major changes for investors and fund complexes. ICI has been in close constant contact with members since the rules were enacted in 2014 and has been working with operations and other professionals throughout the industry to ensure an orderly transition—including fully informing investors—to the new regime in October.
TOPICS: Financial MarketsFund RegulationMoney Market FundsMutual FundOperations and Technology
US T+2 Is Coming—and Bringing Many Benefits with It
By Ahmed Elghazaly
September 6, 2016
On September 5, 2017, equities, municipal and corporate bonds, and unit investment trusts will reduce the amount of time it takes to settle trades from trade date plus three days (T+3) to trade date plus two days (T+2).
TOPICS: Financial MarketsMutual FundOperations and TechnologyTrading
Cybersecurity at Work: The Risks of Information Sharing
By Peter Salmon
August 23, 2016
In the last installment of this series, we wrote about the importance of information sharing. Though important, there is a balance to be struck; you don’t want to share too much information. Growing up in New York City, for example, my friends and I would poke fun at drivers with personalized license plates. “Why would anyone want everyone to know where they were all the time?” was our usual comment.
TOPICS: CybersecurityOperations and Technology
Cybersecurity at Work: The Benefits of Information Sharing Networks
By Peter Salmon
June 16, 2016
In the last installment of this blog series, we wrote about the need for training—specifically, cyber tabletop exercises.
TOPICS: CybersecurityOperations and Technology
Industry Operations Leaders Address Needs of Investors and Advisers
By Candice Gullett
June 6, 2016
In conversations exploring regulation, demographics, and technology, industry leaders offered their perspectives on serving investors and advisers in an evolving world at ICI’s annual Operations and Technology Conference, held concurrently with the General Membership Meeting on May 18–20 in Washington, DC.
Ops Leaders Extol the Transformational Power of Data and Analytics
By Todd Bernhardt
May 26, 2016
The evolution of fund companies’ ability to gather and analyze data is creating a revolution in the way that those companies serve their customers, said panelists at “Big Data Initiatives and the Power of the Cloud,” the session that kicked off ICI’s Operations and Technology Conference on May 19 in Washington, DC.
TOPICS: CybersecurityEventsGMMOperations and TechnologyShareholder
Cybersecurity at Work: Exercise Is Important
By Peter Salmon
April 20, 2016
In this installment of our series focusing on cybersecurity, we are going to look at exercising—not the type of exercising that many of us do to stay in shape, though that is a good place to start.
TOPICS: CybersecurityOperations and Technology
Cybersecurity at Work: Incident Response Plans and What They Entail
By Peter Salmon
March 21, 2016
In this second posting in our series, I’d like to focus on computer incident response planning. In last month’s post, I mentioned that there are many more data breaches that take place than we are made aware of through the media. These cybersecurity events can affect networks large and small, from large multinational corporations to your own home.
Cybersecurity at Work: Creating Passwords That Are More Secure
By Peter Salmon
February 17, 2016
Welcome to the first in a monthly series of ICI Viewpoints focusing on sound practices in cybersecurity.
TOPICS: CybersecurityInternationalOperations and Technology
All Pain and No Gain for Fund Investors
By Paul Schott Stevens
February 5, 2016
The following is a letter submitted to the editor of the New York Times. A financial transaction tax (FTT) (editorial, The Need for a Tax on Financial Trading, Jan. 28) is a terrible idea that would harm all investors, especially American workers saving for retirement. We have yet to see an FTT proposal that would not hurt Main Street nor weaken our capital markets.
TOPICS: Financial MarketsMutual FundOperations and TechnologyShareholderTaxesTrading
Liquidity Risk Management Must Be Done Right
By Paul Schott Stevens
January 15, 2016
The following ICI Viewpoints is a lightly edited version of a letter that ICI President and CEO Paul Schott Stevens sent to U.S. Securities and Exchange Commission (SEC) Chair Mary Jo White, as part of the Institute’s overall response to the SEC’s liquidity risk management proposal.
TOPICS: Financial StabilityFund GovernanceFund RegulationInternationalMutual FundOperations and TechnologyShareholderTrading
How the SEC’s Six-Bucket Approach Could Provide a False Picture of Liquidity
By Brian Reid
January 14, 2016
As I explained in a previous post, I filed a letter on January 13 with the U.S. Securities and Exchange Commission (SEC) in response to its liquidity risk management proposal and to Liquidity and Flows of U.S. Mutual Funds, a study by the Commission’s Division of Economic and Risk Analysis (DERA). My letter was one of four components of ICI’s multipart response to the SEC proposal.
TOPICS: Financial StabilityFund GovernanceFund RegulationInternationalMutual FundOperations and TechnologyShareholderTrading
The SEC’s Liquidity Proposal: Good Goals, Unintended Consequences
By Brian Reid
January 13, 2016
On January 13, I filed a letter with the U.S. Securities and Exchange Commission (SEC), in response to the SEC’s liquidity risk management proposal and to Liquidity and Flows of U.S. Mutual Funds, a study by the SEC’s Division of Economic and Risk Analysis (DERA). My letter was one of four components of ICI’s multipart response to the SEC proposal.
TOPICS: Financial StabilityFund GovernanceFund RegulationInternationalMutual FundOperations and TechnologyShareholderTrading
The First Move: MSRB Issues a Proposal for Shortened Settlement Cycle
By Marty Burns
December 8, 2015
Recently, the Municipal Securities Rulemaking Board (MSRB) opened the door on the regulatory filings needed to move the U.S. securities markets to a shortened settlement cycle.
TOPICS: BondsFinancial MarketsFinancial StabilityFund RegulationOperations and Technology
Mutual Fund Investments in Private Placements: an Overview
By Gregory M. Smith
November 23, 2015
Given recent media interest in mutual fund investments in private placements, it might be helpful to review mutual fund disclosure and valuation obligations. How do funds handle securities that are not publicly traded?
TOPICS: Bond FundEquity InvestingFund GovernanceFund RegulationInvestment EducationMutual FundOperations and TechnologyTrading
Cybersecurity: Managing Risk in an Increasingly Connected World
By Todd Bernhardt
June 12, 2015
It’s increasingly obvious that we live in a world where cyber threats are evolving quickly and will remain persistent. But though such risks can never be eliminated, they can be managed, said panelists at ICI’s Operations and Technology Conference, held in conjunction with the Institute’s General Membership Meeting May 6–8 in Washington, DC.
TOPICS: CybersecurityEventsFund GovernanceGMMOperations and Technology
Adapting to the Rapidly Evolving Cybersecurity Environment
By Todd Bernhardt
June 6, 2014
Because external hackers typically try to “look like an insider” when attempting to penetrate IT systems, “every cyberattack is likely an ‘internal’ attack,” according to Mark Clancy, managing director of technology risk management at the Depository Trust & Clearing Corporation (DTCC).
TOPICS: CybersecurityEventsGMMMutual FundOperations and Technology
SEC Chair White Stresses Need for FSOC to Consult Sources for Necessary Expertise
By Rachel McTague
May 22, 2014
Securities and Exchange Commission (SEC) Chair Mary Jo White today called for the U.S. Financial Stability Oversight Council (FSOC) to use outside expertise to the degree necessary in its process of designating systemically important financial institutions (SIFIs). She asserted that it is “enormously important for FSOC, before it makes any decision of any kind, to make sure it has the necessary expertise on any of those issues.”
TOPICS: EventsFederal ReserveFinancial MarketsFinancial StabilityFund GovernanceFund RegulationGMMGovernment AffairsMoney Market FundsMutual FundOperations and TechnologyShareholderTradingTreasury
Updated FICCA Framework Makes Auditing Omnibus Accounts Easier, More Efficient
By Kathy Joaquin
January 27, 2014
Many financial intermediaries—such as broker-dealers, financial advisers, and retirement plan recordkeepers—provide services to fund shareholders and maintain customer account information on their own recordkeeping systems. Fund sponsors, in turn, want to ensure that intermediaries are meeting their obligations in servicing fund shareholders, and so, have been seeking oversight tools that allow them to do this efficiently and effectively. ICI recently took steps to improve one of the critical oversight tools available to the industry, through a major update of the Financial Intermediary Controls and Compliance Assessment (FICCA) engagement framework.
TOPICS: Fund GovernanceFund RegulationMutual FundOperations and Technology
FASB Proposal to Change Accounting for Investments in Funds
By Gregory Smith
May 17, 2013
The Financial Accounting Standards Board (FASB) recently released a proposal that will change how corporate investors in funds report changes in the fair value of their investments in earnings.
TOPICS: Operations and Technology
An Operations Issue to Watch: Shortening the Settlement Cycle
By Martin A. Burns
November 15, 2012
Should the time between the execution of securities trades and settling payment be reduced in U.S. markets? The Depository Trust & Clearing Corporation (DTCC)—the financial industry utility that processes securities transactions, including those for the fund industry—has recently delved into this question, aided by a study from the Boston Consulting Group (BCG). The study examines the costs of moving to a shortened settlement cycle and the time it would take to pay off those costs given the potential savings from operational and efficiency gains.
TOPICS: Operations and Technology
Paper Concludes Amortized Cost Is Appropriate for Money Market Funds
By Gregory Smith
November 2, 2012
A recently released paper examines the use of amortized cost by money market funds and concludes that its use is appropriate given the short-term, high-quality nature of these funds’ investments. The paper also discusses how use of amortized cost is well supported by more than 30 years of regulatory and accounting standard-setting consideration. Author Dennis R. Beresford is the Ernst & Young executive professor of accounting at the J. M. Tull School of Accounting, Terry College of Business at the University of Georgia. Beresford served as chairman of the Financial Accounting Standards Board (FASB) for more than ten years.
TOPICS: Money Market FundsOperations and Technology
Avoiding Disclosure Overload in Fund Financial Statements
By Gregory Smith
September 28, 2012
Shareholders of SEC-registered investment companies regularly receive detailed financial statements, a key part of the disclosure regime that produces transparency for fund investors.
TOPICS: Operations and Technology
Money Market Fund Redemption Restrictions Would Drive Investors and Intermediaries Away from Money Market Funds
By Kathleen Joaquin
June 21, 2012
If you’re like most investors, money market funds mean stability, liquidity, and convenience.
Yet, some of these hallmark features could become a thing of the past if the Securities and Exchange Commission (SEC) imposes redemption restrictions on money market funds.
How would these redemption restrictions work?
The SEC’s contemplated redemption restrictions would essentially deny investors full use of their cash by escrowing a portion of a shareholder’s money market fund account on an ongoing basis. In the unlikely event that the fund breaks the dollar, the restricted shares would then be used to absorb first losses.
TOPICS: Fund RegulationMoney Market FundsOperations and Technology
Rulemaking Must Reflect Realities of Funds’ Access to Shareholder Information
By Kathleen Joaquin and Tamara K. Salmon
April 30, 2012
We are seeing a troubling development in Washington. In high-profile areas such as money market funds and anti–money laundering measures, regulators continue to pursue rules premised on the notion that mutual funds know or can obtain detailed information on each of their underlying shareholders.
TOPICS: Fund RegulationMoney Market FundsOperations and Technology
PCAOB Must Demonstrate Need for Mandatory Audit Firm Rotation
By Amy Lancellotta and Gregory Smith
December 22, 2011
The Independent Directors Council (IDC) and the Investment Company Institute (ICI) oppose requiring a mandatory rotation of audit firms as detailed in a concept release from the Public Company Accounting Oversight Board (PCAOB).
Switching to International Accounting Standards Wouldn’t Likely Benefit U.S. Fund Investors, ICI Tells SEC
By Gregory M. Smith
June 14, 2011
A key issue for ICI’s Operations team is regulator interest in harmonizing worldwide accounting standards. As Donald Boteler, ICI’s Vice President for Operations and Continuing Education, said in ICI’s latest annual report, “It’s a noble purpose, but it’s a big, big challenge.”
Copyright © 2019 by the Investment Company Institute