The newly-created SEC Investor Advisory Committee gathered today in an open meeting at SEC Headquarters. The goal of the committee will be to provide a greater voice to investors, and the committee will have the ability to make recommendations to the SEC on policy issues. Today's meeting represents the committee's formal introduction to the public and also provided the committee the opportunity to discuss its agenda and organization.
While discussing proposed future agenda items this morning, committee members showed great interest in further examining fiduciary duties. Stephen Davis, Senior Fellow and Project Director for the Yale University School for Management's Millstein Center for Corporate Governance, specifically called for a full review of fiduciary duties and suggested that a subcommittee be formed to fully analyze the current status of the fiduciary duties in U.S. law and to compare it to international standards. Mark Anson of Nuveen Investments noted the importance of defining what is a fiduciary standard, while Mac Hisey of AARP Financial Incorporated and AARP Funds highlighted the need to understand what investors think the standard is as well. Barbara Roper of the Consumer Federation of America voiced concern that the fiduciary standard may be part of a broader issue related to investors' confusion about the difference between investment advisors, broker-dealers, and other investment and financial professionals and suggested that the committee take a step back and ensure that all underlying issues, including fiduciary duties, be considered when addressing investor confusion. Mercer Bullard of Fund Democracy America noted the importance of providing predictability of what is required under a fiduciary standard in certain areas, such as how to disclose conflicted fees, while still providing some regulatory flexibility to address unpredictable areas on a fact-by-fact basis.
Given these comments, it is clear that fiduciary duties will be a focal point at one or more future committee meetings. This afternoon, the committee will continue to discuss future agenda items and is also expected to address possible refinements to the disclosure regime, including disclosure to investors in 401(k) plans. For more information on the SEC Investor Advisory Committee, including today's meeting agenda and a briefing paper on disclosure issues can be found here.
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