SEC’s Division of Investment Management Director Speaks on History of the Investment Company Act and Investment Advisers Act

April 24, 2010

Andrew "Buddy" Donohue, the Director of the SEC's Division of Investment Management, spoke in Denver, Colorado about his Division's recent initiatives and industry's developments.

He began by discussing the Task Force on Investment Company Use of Derivatives and Leverage, which was formed in response to his challenge to the American Bar Association to give some thought to new approaches that would address the concerns that have arisen regarding fund investments in derivatives. The Task Force is currently considering recommendations regarding how the SEC might improve regulations and regulatory guidance.

He reviewed the 1940 Act, noting that to oversee the management of the conflicts of interest inherent in the mutual fund structure, the Act mandated that investment companies be governed by a board of directors. The boards consist in almost all cases of a majority of independent directors, unaffiliated with the fund's adviser or certain other third parties. A fund's independent directors continue to play a critical role in overseeing fund operations and protecting the interests of investors.  He also reviewed the history of the Advisers Act.

Click to access the speech.


Exchange-Traded Funds (ETFs), Investment Advisers, Mutual Funds, Speeches & Testimony