SEC Investment Management Director Champ Discusses the Top 10 Lessons Learned and Points to Remember from 2014

In his keynote remarks before the ICI 2014 Securities Law Developments Conference, SEC Division of Investment Management (the "Division") Director Norm Champ discussed the Division's top 10 lessons learned and points to remember from 2014.

1. Recognize the Division's progress to "fulfill its basic purpose as a vehicle to diversify the small investors' risk."
2. Investor protection remains critically important. Director Champ explained that the SEC must get in front of industry developments rather than reacting when unanticipated issues manifest.
3. Open communication with the public is imperative. According to Director Champ, throughout the year, the Division has undertaken efforts to increase communications with financial industry participants, which will lead to better policy recommendations and decisions.
4. As technology evolves and financial markets become more complex, "a strong compliance culture is becoming increasingly important." Part of the Division's effort to encourage firms to create a strong compliance culture involves communicating with senior-level officials in order to ensure that firms have the tools, resources and support needed for a robust compliance program.
5. Appropriate innovation is necessary "to help meet the needs and demands of investors." Director Champ explained that the Division's review of requests for no-action and exemptive relief is a way for the SEC to monitor new trends and risks in order to anticipate, identify and monitor the risks of the current investment landscape.
6. Regulatory transparency provides a mutual benefit for both the public and regulators. Director Champ noted that the guidance updates serve as "meaningful communications" regarding discrete issues. In the upcoming year, he stated, the Division will work toward even better communications with the public.
7. Data plays an important role in developing policy and regulations. One goal for the upcoming year, Director Champ noted, is the review and analysis of information obtained from Form ADV and Form PF.
8. Risk monitoring is an important area of focus.
9. The Division is not a "regulatory island," nor should it be. Director Champ noted that the Volcker Rule and money market mutual fund amendments were two areas in which intra-office and inter-regulatory coordination became essential to implementing regulation successfully.
10. An organization is only as strong as its staff. Director Champ explained that the Division has increased its expertise and diversity of knowledge to create a more effective and comprehensive Division to address an ever-changing regulatory landscape.

See: Norm Champ's Speech.