SEC Enforcement: Self-Reporting Share Class Selection Disclosure Initiative
Journal of Investment Compliance
ISSN: 1528-5812
Article publication date: 4 July 2018
Issue publication date: 14 August 2018
Abstract
Purpose
This paper aims to explain the U.S. Securities and Exchange Commission’s (SEC’s) recent Share Class Selection Disclosure (SCSD) Initiative, which offers potentially favorable settlement terms to investment advisers who self-report to the SEC’s Enforcement Division violations of the federal securities laws relating to certain mutual fund share class selection issues and to discuss factors for consideration by investment advisers regarding their possible participation in this initiative.
Design/methodology/approach
This paper discusses the conditions and terms of the SEC’s SCSD Initiative, the SEC’s focus on conflicts of interest associated with mutual fund share class selection, the applicable law, the complex nature of these issues and the factors that investment advisers should consider in determining whether to participate in the initiative.
Findings
The assessment of the facts and the evaluation and analysis of the issues may be both time-consuming and complex. Firms need to carefully consider whether the potential benefits of self-reporting outweigh any possible downsides, including the potential collateral consequences that an SEC enforcement action may have on their business operations.
Originality/value
This paper contains valuable information about a recent SEC Enforcement Initiative and provides practical guidance from experienced securities counsel.
Keywords
Citation
Greenberg, E. (2018), "SEC Enforcement: Self-Reporting Share Class Selection Disclosure Initiative", Journal of Investment Compliance, Vol. 19 No. 2, pp. 16-18. https://doi.org/10.1108/JOIC-04-2018-0037
Publisher
:Emerald Publishing Limited
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