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Companies Gear Up For XBRL Reporting

August 11, 2008 - The Securities and Exchange Commission could mandate the use of eXtensible Business Reporting Language (XBRL) in mutual fund risk return summaries by as early as the first quarter of next year, according to industry experts, putting many fund companies on the data-tagging fast track. XBRL US, the U.S. version of the international consortium, has joined forces with Andover, Mass.-based mutual fund data provider NewRiver to make sure public companies, mutual funds and credit rating agencies are ready in time.

SEC Prepares to Close the GAAP

August 4, 2008 - NEW YORK - A lot of people are wondering when the U.S. will adopt the same international standards for financial reporting that Europe and the rest of the world seem to be moving toward. The rule-based, Generally Accepted Accounting Principles (GAAP) have been around in the U.S. for years, but differ from the principle-based International Financial Reporting Standards (IFRS) that the European Union adopted in 2005. Currently more than 100 countries have moved to incorporate or are allowing IFRS, according to the global tax and advisory service firm Ernst & Young, in a presentation last week.

DTCC, Swift Partner on Alternative Messaging

July 21, 2008 - The Depository Trust & Clearing Corp. (DTCC) and the Society for Worldwide Interbank Financial Telecommunication (Swift) are working together to introduce 12 interoperable XML-based message formats to the alternative investment community. The initiative is designed to allow market participants to connect to DTCC's Alternative Investment Products (AIP) platform, slated to begin testing in the third quarter, via the Swift network using International Organization for Standardization (ISO) 20022-compliant XML messages. Firms will also be able to use proprietary formats through DTCC's Smart network.

Going Green Can Save Fund Firms Millions

July 7, 2008 - In November of last year, the Securities and Exchange Commission proposed a rule to decrease the prospectuses of mutual fund firms to summaries of around three pages that could be accessed online.

Legg Slashes CEO's, Founder's Salaries

July 7, 2008 - In light of Legg Mason's recent struggles and dropping stock price, the company has slashed the pay of CEO Mark Fetting and its founder Raymond 'Chip' Mason.

Hedge Funds Fear New SEC Regulations

June 30, 2008 - NEW YORK - The freewheeling days for hedge funds may be numbered. Depending on who gets elected to the White House in November, the next Securities and Exchange Commission may push to impose additional regulations on hedge funds that, many critics say, could strangle managers' ability to generate exceptional returns. Ironically, hedge fund experts say the best way for the industry to prepare for the new regulations may also be the best way to prevent the new regulations from happening.

Distribution Road Hits Superhighway

June 30, 2008 - WELLESLEY, Mass. - Gone are the supposed days when wholesalers stood around conference booths all day, cavalierly handing out golf balls, or taking brokers out for cigars and whiskey. To get through the new 'Fund Selection Unit' gatekeepers at brokerage firms, today's wholesalers need not just have excellent people skills and be nimble, but be highly knowledgeable about the mutual funds they are selling, retirement planning issues and the economy, as well as be technologically savvy. 'Wholesalers act as the quarterback in the field,' said Matthew Witkos, president of Eaton Vance Distributors, at the National Investment Company Service Association's General Membership Meeting here, held last Monday at the Wellesley Country Club. 'They have such a huge responsibility. Imagine trying to remember what product you have on what platforms at what time.'

Going For The Top

June 16, 2008 - When News Corp. Chairman and CEO Rupert Murdoch speaks, we in the financial publishing world listen, just as fund managers hang on words from Warren Buffett, Bill Gross or Peter Lynch. And while we don't profess to be The Wall Street Journal, the flashy new publisher of that paper's take on his readers is one worth noting, for it parallels what we aim to achieve here at Money Management Executive.

SEC's IT Catch-up Like Turning a Battleship

June 16, 2008 - Leading-edge technology has never been a hallmark of the Securities and Exchange Commission. While investment management has gone hand-in-hand with cutting-edge technology for the past quarter century, information technology typically accounted for just 8% of the Commission's annual budget in 2005, according to TowerGroup. Rather than invest in IT, the SEC has largely relied on self-regulatory organizations-NASD and NYSE Regulation, prior to the formation last year of the Financial Industry Regulatory Authority-to buy and build systems to identify possible violations. For an agency with outsize responsibilities, its tech footprint has been surprisingly modest.

Board Portals Increase Freedom, Efficiency

June 16, 2008 - The passage of the Sarbanes-Oxley Act dramatically increased the volume of materials corporate executives and boards have to review, and staying on top of this mountain of paperwork can be overwhelming. Board materials in the financial services industry can easily be thousands of pages long, said Marc Daniels, chief operations officer for Diligent Board Member Services. Printing all that material for every board member amounts to hours standing by the copy machine and hours of collating pages by hand - often with two or three assistants covering every surface of the boardroom table and floor with piles of paper, he said.

Rolling Out the 6th Annual Fund Operations Awards

June 2, 2008 - Welcome to Money Management Executive's 6th Annual Fund Operations Awards. You can now find entry forms and detailed guidelines at our website, www.mmexecutive.com.

SEC Regulatory Outlook Looks Iffy for Rest of 2008

June 2, 2008 - Many mutual fund industry analysts are skeptical that the Securities and Exchange Commission will take final action on any of its outstanding proposals this year, but if it does, the summary prospectus and XBRL tagging are likely to top the list, with a proposal on changes to 12b-1 fees to follow in 2009. 'I don't have a lot of high hopes for anything being adopted before the end of the year,' said Geoffrey Bobroff, president of the Greenwich, R.I.-based mutual fund advisory firm Bobroff Consulting.

XBRL to Create True, National Fund Supermarket

May 26, 2008 - The Securities and Exchange Commission voted unanimously last Wednesday on a proposal that would require mutual funds to provide risk/return, fee and strategy information using the same new digital data tagging system as the 500 largest U.S. corporations. In essence, it would empower investors to be able, at the click of a mouse, to 'comparison shop' the 8,000 mutual funds in existence-potentially rejecting an offering because of a fraction of a higher price or lower performance.

Funds Benefit-And Suffer From Trustee Oversight

May 26, 2008 - PHILADELPHIA - Boards may have grown in power since the passage of the Sarbanes-Oxley Act of 2002, but mutual fund companies should take care to temper that influence so it doesn't interfere with business. 'Since Sarbanes, boards have flexed their muscles and shown their independence,' said Robert Mulhall Jr., a partner with Ernst & Young LLP, at the National Investment Company Service Association's East Coast Regional Meeting here last week at the Union League Club.

Salutations Where Salutations Are Due

May 19, 2008 - The mood at the Investment Company Institute's 50th Annual General Membership Meeting in Washington, D.C., earlier this month, themed 'Our Foundations, Our Future,' was markedly upbeat. Certainly, this is welcome and refreshing, especially following the dot-com crash of 2000-2001, the mutual fund scandals of 2003-2005 and this year's subprime credit crisis hitting the financial services industry and Wall Street, in particular, so hard. Executives, starting with a keynote from ICI President Paul Schott Stevens (see Week in Review, page 6), once again sounded the drumbeat on our industry's resounding, vital importance to the investor, especially on the eve of 77 million Baby Boomers entering retirement. We go to work every day thinking foremost about our fiduciary responsibility, and, surely, want to get it right, for them, for our own families and for ourselves.