Fund Managers Still Seeking To Avoid Accountability, SEC Official Argues

by Glen Shapiro, LawAndTax-News.com, New York

24 March 2004

Despite all that has happened within the US mutual fund industry over the past few months, some fund managers are still seeking to duck accountability, according to Paul Roye, the head of the Securities and Exchange Commission's Investment Management Division.

Speaking on Monday, Mr Roye suggested that many of the criticisms of the SEC's reform plans for the mutual fund industry "can be chalked up to efforts to avoid accountability".

He went on to add that in his view, many fund managers are opposing moves to make them more accountable "because they seek to avoid their responsibility for oversight of the funds on whose boards they serve".

Earlier this month, the SEC voted 5-0 in favour of proposals to increase disclosure by mutual funds with regard to their portfolio managers.

Under the planned measures, which have been sent out for public comment, funds would be obliged to identify portfolio managers by name and title, give detail of their experience and role, describe how their pay is set, and provide some information about shares held by the portfolio managers in the funds that they manage.

Funds would also be obliged to disclose other accounts managed by their portfolio managers, in addition to describing "any conflicts of interest that may arise" from the manager's handling of more than one fund.

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