Compliance and CCO Oversight
In 2004, the U.S. Securities and Exchange Commission adopted Rule 38a-1 under the Investment Company Act of 1940—the fund compliance program rule—which provides fund boards with tools for overseeing compliance and assigns them specific responsibilities relating to the compliance function. Among other responsibilities, the board approves the fund’s policies and procedures, as well as those of the fund’s adviser, principal underwriter, administrator, and transfer agent. The board also approves the designation, compensation, and removal of a fund chief compliance officer (CCO).
At least once a year, the CCO must provide a written report to the board that, at a minimum, addresses the operation of the fund’s policies and procedures and each material compliance matter that occurred since the date of the last report. The CCO also must meet in executive session with the fund’s independent directors at least once a year.
IDC Webinar: Fund Industry Litigation, SEC Enforcement Activity, and Director Indemnification and Insurance
IDC Webinar: Core Responsibilities of Fund Directors - Session 5: Specific Regulatory Responsibilities
IDC Webinar: Core Responsibilities of Fund Directors - Session 4: Oversight of Fund Service Providers
IDC’s memos inform directors about important regulatory, legislative, and judicial developments. IDC also comments on proposals that could affect board responsibilities or shareholder interests. See below for recent comment letters and memos on selected topics.
SEC Issues Second No-Action Letter on Board Responsibilities
SEC Issues No-Action Letter on Board Responsibilities