Kit Addleman in BoardIQ: Exam Priorities Show Continued Interest in Fund Boards

01/28/2014


Many of the items listed in this year's roundup of Securities and Exchange Commission examination priorities are the same as they were in 2013. While fund governance is no long listed as an emerging topic, the commission notes it will still meet with senior management and boards...

The upshot of this year's priorities is that boards should continue strengthening their oversight of a variety of areas, attorneys and other say. Directors should also expect that the commission will continue its scrutiny of fund board activity, they say.

"There is a lot of carryover emphasis in the adviser space: custody, never-before-examined advisers, quantitative analysis, conflicts of interest," says Kit Addleman, a partner at Haynes and Boone, LLP and former director of the SEC's Atlanta regional office. "Those continue to be areas where the boards need to engage, in large part because the SEC states they will continue to meet with senior management and board."

She notes that increased engagement doesn't mean taking on fund management duties. The commission doesn't expect the board to be the one assessing conflicts of interest, for example. On that topic, the SEC would expect to see "the board being engaged in insuring that there is some process surrounding that," Addleman says. "That's where the SEC is looking for active board participation. If I was a board member, I would continue to step that up."

Excerpted from BoardIQ, January 28, 2014. To view full article, click here (subscription required).

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