New SEC Division of Investment Management Director Speaks at Conference

November 1, 2012

Norm Champ, the new Director of the Division of Investment Management of the SEC, spoke at the ALI CLE Conference on Life Insurance Products in Washington, D.C. He began by discussing the challenges the Division of Investment Management faces. He then reviewed a recently published financial literacy study that was mandated by the Dodd-Frank Act. He stated that the study identified methods to improve the timing, content, and format of disclosures, as well as useful and relevant information for investors to consider when either selecting a financial intermediary or purchasing an investment product. The study noted that, generally, retail investors prefer to receive disclosures before making an investment decision. He also noted that the study found that retail investors find information about fees and expenses, performance, principal risks, and investment objective to be useful and relevant when purchasing an investment product.
He next spoke about  the SEC’s new Investor Advisory Committee. This committee was established by the Dodd-Frank Act to advise and consult with the SEC on, among other things, regulatory priorities, the effectiveness of disclosure, and initiatives to promote investor confidence and the integrity of the securities marketplace. He noted that by statute, the members of the Committee include a representative of state securities commissions, a representative of the interests of senior citizens, and members who represent the interests of both individual and institutional investors. He encouraged better communications between industry and the SEC.
He then discussed the risk-based approach his Division is taking. He stated that the Division is applying a systematic cost-benefit analysis to the prioritization of its work. The Division is looking at factors that further the SEC’s mission, including the risks to investors, capital formation, and efficient markets that would be addressed by various initiatives as well as the impact that various regulatory approaches would have on investors, capital formation, and efficient markets. The Division is also looking at impacts on the operational efficiency of regulated entities, as well as on its own operational efficiency, and the resources needed to bring various initiatives to fruition.
He concluded his speech by discussing various issues involving insurance products.
Click here to access the speech.


Investment Advisers, Investment Companies