In This Issue:

- Regulation

..SEC Chair’s Agenda Provides Glimpse of New Rules to Come

..The Results Are In: Investors Favor Additional Regulatory Protection

..SEC Declines to Approve Non-Transparent ETFs

..SEC Gives the Nod to Exchange-Traded Mutual Funds

..SEC’s Champ: Staff to Focus on Alt Fund Risk Disclosure

..SEC Staff Finds that Broker-Dealers Still Are Not Conducting Adequate Section 5 Reviews

..Referral Fees and Commission Sharing— When May Broker-Dealers Share Their Fees with Non-Brokers?

..IM Chief Accountant’s Office Weighs in on the Presentation of Consolidated Financials

- Enforcement + Litigation

..SEC Charges Broker-Dealer for Failure to Protect Against Insider Trading by Employees

- Tidbits

- Excerpt from SEC Chair’s Agenda Provides Glimpse of New Rules to Come:

SEC Chair Mary Jo White recently offered a peek into new SEC rule proposals we can expect to see in the coming months. The sneak preview includes some eye openers from the Division of Investment Management (IM), like proposed rules requiring funds to adopt liquidity management programs and requiring large asset managers to conduct stress-testing. The insights were contained in the agenda of SEC rulemaking actions published on October 21, 2014 by the Office of Information and Regulatory Affairs of the President’s Office of Management and Budget. Here are some of the items of particular interest:

Investment company use of derivatives. IM is considering recommending that the SEC propose new rules under the 1940 Act addressing funds’ use of derivatives. It is not clear whether the proposal will address some of the more knotty issues, such as segregation of assets or how to define concentration or diversification when a fund uses derivatives.