Investment Company Regulation and Compliance
Free PodCast
Listen to "Panel 1: Overview of the Laws that Govern Mutual Funds" from the program Investment Company Regulation and Compliance originally presented June 6-8, 2007
What You Will Learn
Originally designed by regulators for their staff and presented by ALI-ABA since 1975, this annual course of study, comprising more than 16 hours of instruction, provides the most comprehensive training and "refresher" available in mutual fund law and compliance. All of the core principles of the Investment Company Act of 1940 ("1940 Act"), and how the Act affects the operations of the fund and its service providers (adviser, distributor, transfer agent, and administrator) are explained in depth by leading faculty experts.
The course is designed for attorneys, Chief Compliance Officers and other compliance professionals, and anyone concerned with starting, registering, or operating funds.
Leading experts from the private bar, the industry, and SEC and FINRA regulators provide practical, up-to-date instruction and advice on all areas of mutual fund law and compliance, including the "hot topics" of the day. Counseling investment companies, their advisers, independent directors, and broker-dealers on a wide range of complex regulatory and compliance issues, many of the faculty also have significant SEC experience, serve as adjunct law school professors, and regularly contribute to leading publications in the securities field.
The faculty members discuss the timeless principles underlying the regulations to help you spot new issues and solve problems as they arise in your business. Timely and practical topics are discussed, including the ethical and conflict of interest questions that might confront you as the attorney or CCO representing both the fund and the adviser. Time is reserved in every session to address your questions.
Note: Take this course as a group! It is also is available as a LIVE VIDEO webcast at your desktop! Go to the Group Webcast Page for detailed information about participating in ALI-ABA's live webcasts. For group webcasts, please email Ruth Johnson at rjohnson@ali-aba.org for registration instructions and tuition discounts.
Certain portions of the webcast may be available for purchase as individual segments. Go to www.ali-aba.org or watch for email notifications for updates.
Planning Chairs
(also on faculty)
Thomas S. Harman, Partner, Morgan, Lewis & Bockius LLP, Washington, D.C. (former Associate Director, SEC Division of Investment Management)
Karen L. Skidmore, Senior Associate General Counsel, Franklin Templeton Investments, San Mateo, California (former Assistant Director, SEC Division of Investment Management)
Faculty
KEYNOTE SPEAKER
Robert E. Plaze, Associate Director (Regulation), Division of Investment Management, U.S. Securities and Exchange Commission, Washington, D.C.
Robert G. Bagnall, Partner, Wilmer Cutler Pickering Hale and Dorr LLP, Washington, D.C. (formerly Senior Special Counsel, Office of Chief Counsel, SEC Division of Investment Management)
Lawrence A. Friend, CPA, Industry Consultant, Potomac, Maryland (former Chief Accountant, SEC Division of Investment Management)
Alexander C. Gavis, Vice President and Associate General Counsel, Fidelity Investments, Boston (former Senior Counsel, SEC Office of General Counsel)
David S. Goldstein, Partner, Sutherland Asbill & Brennan LLP, Washington, D.C. (formerly Special Counsel, SEC Division of Investment Management)
Barbara Brooke Manning, Chief Compliance Officer, ClearBridge Advisors, New York (former Assistant Regional Administrator, SEC New York Regional Office)
W. John McGuire, Partner, Morgan, Lewis & Bockius LLP, Washington, D.C. (former Staff Attorney, Office of Chief Counsel, SEC Division of Investment Management)
Philip H. Newman, Partner, Goodwin Procter LLP, Boston
Elizabeth G. Osterman, Associate Director, Exemptive Applications and Special Projects, Division of Investment Management, U.S. Securities and Exchange Commission, Washington, D.C.
Nadya B. Royblat, Assistant Director (Exemptive Applications), Division of Investment Management, U.S. Securities and Exchange Commission, Washington, D.C.
Joseph P. Savage, Vice President, Investment Companies Regulation, Financial Industry Regulatory Authority (FINRA), Rockville, Maryland
Stephen J. Shenkenberg, Managing Director, General Counsel, and Chief Compliance Officer, Munder Capital Management, Birmingham, Michigan
Program Schedule
This comprehensive course is carefully planned to tailor the two-and-one-half days of instruction to your needs. Using case studies and drawing from their extensive experience in the field, this interactive panel walks you through the intricacies of mutual fund regulations and how they apply to your business. Ample time is reserved for your questions and concerns.
Overview of the Securities Laws that Govern Funds
An investment company: definitions and exceptions; an introduction to the applicable major federal statutes: the Investment Company Act of 1940, the Investment Advisers Act of 1940, the Securities Act of 1933, the Securities Exchange Act of 1934, the Internal Revenue Code of 1986, ERISA, the Gramm-Leach-Bliley Act, the USA Patriot Act, and the Sarbanes-Oxley Act
The "Whys" and "Hows" of Starting a Mutual Fund
Choosing the right external structure - business trust, corporation, LLP - and internal structure - series fund, feeder fund, multi-class - for your intended distribution channel; the mechanics and checklists
The Prospectus and "Plain English" Disclosure
Preparing the offering documents and successfully completing the SEC registration process; review of the newly proposed simplified prospectus and N-1A rules for mutual funds; latest enhanced disclosure requirements; making changes through prospectus "stickers"; shareholder reports and proxies
Distribution and Marketing
Review of the many sales channels - traditional broker/dealer and direct sales, fund supermarkets, banks, advisers, retirement and wrap fee markets, insurance companies; regulatory issues with paying sales compensation; SEC and FINRA advertising rules, performance advertising; marketing and selling on the Internet
Portfolio Management and Trading
Investment objectives, fund of funds limitations, derivatives; pricing rules for fund shares and individual securities, liquidity requirements, pricing errors; taxes, dividends and distributions, and diversification rules; accounting issues; soft dollars, directed brokerage, and "bunching" of trade orders
Fund Operations
Fund recordkeeping and reporting, financial statement requirements, and shareholder reports; transactions with affiliates, codes of ethics, and personal trading; fund service agreements, fidelity bonding, D&O and E&O insurance; anti-money laundering, privacy, and Sarbanes-Oxley corporate accountability regulations
Corporate Governance
Duties and roles of independent and inside directors, outside counsel, shareholders, and fund managers; corporate governance regulations; audit committee; approval and renewal of key contracts: advisory, underwriting, 12b-1 plans, service providers; shareholder meetings; fund mergers
Regulatory Process, Enforcement, and Litigation
SEC inspections and enforcement; recent litigation
Focus on Derivatives A special panel focused on the key strategies for addressing a fund's use of derivative and control of risks, including investment, operational, legal, compliance, and reputation risks
Hot Issues
Subprime challenges, exchange traded funds; revenue sharing; soft dollars and potential conflicts of interest issues
Compliance Programs and Chief Compliance Officer(s)
Elements of an effective compliance program; the annual report; internal controls that prevent, detect, and correct securities law violations; considerations in performing internal assessments, and risk, "gap," and conflicts of interest analyses; the role, responsibilities, and authority of a chief compliance officer; records management policies, including email and instant messaging; and attorney-client privilege
Ethical Considerations of Counsel, including attorney reporting rules (one hour)
The course begins at 8:30 a.m. on Wednesday, July 16, with registration beginning at 7:30 a.m.; the course adjourns for the day at 5:30 p.m. A networking reception for registrants and faculty follows sponsored by Morgan Lewis & Bockius LLP, an international law firm and a leading provider of legal services to the investment company industry. Thursday's program (July 17) also runs from 8:30 a.m. to 5:30 p.m., while Friday's program (July 18) runs from 9:00 a.m. to 12:15 p.m. Lunch breaks are from 12:10 to 1:50 p.m., both Wednesday and Thursday. Continental breakfasts are served daily; 20-minute refreshment/networking breaks are provided each morning and afternoon. Times are subject to minor change. This course is also available in half-day segments.
Total 60-minute hours of instruction: 16.25, including one hour of ethics
Suggested Prerequisite: Limited experience in general legal practice or completion of CLE Orientation Course
Educational Objective: Acquisition of knowledge and skills to develop proficiency as a practitioner; provision of information on recent legal developments
Here's what registrants have said about this course:
"In more than 25 years of law practice, I would rank this as one of the 2 or 3 best CLE programs I have attended. Great materials; knowledgeable and articulate faculty; balanced treatment of outside counsel/regulatory/operational perspectives. Nicely done!"
"Great program. The background to the issues and the basis for their creation was, and will continue to be, invaluable."
"The course was particularly helpful to me as a new practitioner in this area. The panelists were conscious of the fact that some of us have little to no experience. Mr. Harman was particularly effective as a moderator and panelist."
"The course was excellent. As a new '40 Act attorney, I found the condensed survey of the entire area to be very beneficial. The materials are great and I anticipate frequent referral to those in my practice. The best part was the panel members. I thoroughly enjoyed hearing the perspective of those veterans on very important topics."
"This course was recommended by a coworker as a platform that ties together the somewhat disconnected pieces of the '40 Act that I've been learning during my first 6 months on the job. The course met that expectation and has allowed me the opportunity to begin to piece together this detailed puzzle known as the '40 Act. There were times when the light bulb finally came on. The presenters all seem to be near the top of the field and people to learn quality information from."
"Excellent course. I was impressed with the knowledge and experience of all panel members. The panel was able to talk not only about the rules but actual implementation of the rules in the industry."
"The various groups who have an interest in the mutual fund industry were well represented, plus having the SEC represented provided the needed balance. Pretty much hit all the hot topics!"
"A highly effective course, as promised."
"Tom Harman is a superb moderator - kept egos in check and moved things along. I also appreciated his breaking in and asking questions to make sure panelists didn't pass over things too quickly."
"Panelists were great. Harman asked excellent questions and played devil's advocate well."
"Very well organized and interesting panel discussions. Highly recommend all legal professionals attend such a course like this one."
