October 2016


November 1, 2016 | Permalink
The CFTC's Division of Market Oversight further extended the time-limited no-action relief for swaps executed as part of a package transaction in categories currently receiving relief under CFTC Letter 15-55. The extension enables the division to continue assessing the appropriate response for applying the trade execution requirement to swaps in certain types of package transactions.
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November 1, 2016 | Permalink
In an attempt to eliminate potential conflicts of interest before the Department of Labor's fiduciary rule takes effect next year, Bank of America Merrill Lynch told its financial advisers to stop selling mutual funds in brokerage-based individual retirement accounts. The funds are still available in Merrill Lynch investment advisory program accounts and non-retirement brokerage accounts, however the brokerage firm is seeking to eliminate potential compensation conflicts that could arise ahead of the rule's April 10, 2017 effective date. Clients with existing mutual funds in a commission-based IRA won't be required to sell and can continue to make dividend reinvestments.
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November 1, 2016 | Permalink
SEC staff provided additional economic analysis related to its proposed rule regarding the use of derivatives by registered funds and business development companies. The analysis is part of the comment file for a rule the SEC proposed in December 2015 designed to enhance regulation of the use of derivatives by registered investment companies, including mutual funds, ETFs and closed-end funds, as well as business development companies. The proposed rule would limit funds' use of derivatives and require them to put risk management measures in place, which would result in better investor protections. The analysis evaluates the internal consistency of commenters' suggested risk-adjustment and haircut schedules across asset classes and categories for purposes of risk-adjustment and risk-weighting with respect to the rule.
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October 28, 2016 | Permalink
The Labor Department's fiduciary rule, unveiled in April, is affecting the broker recruitment efforts of many large banks. Morgan Stanley says it will immediately pull its incentive-laden back-end portions of the recruitment packages it offers to prospective brokers from rivals in order to eliminate potential conflicts under the rule. Meanwhile, competitors including Merrill Lynch and Wells Fargo are considering doing the same. The changes could result in more brokers becoming independent financial advisers by launching their own registered investment advisory firms, the Wall Street Journal reports.
Related News:
Advisers failing to comprehend impact of DOL fiduciary rule: Massachusetts regulator William Galvin - Investment News (reg. req.)
DOL fiduciary rule FAQs emphasize dangerous compensation practices, including for RIAs - Investment News (reg. req.)
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October 20, 2016 | Permalink
Investment research and investment management firm Morningstar is constructing a new set of style boxes exclusively for liquid alternative funds. The style boxes will track patterns of volatility and correlation to global equity markets based on past performance. Although they aren't seen as a perfect solution for measuring liquid alternatives, the style boxes are considered a step in the right direction for differentiating liquid alts from traditional funds.
Related News:
Morningstar launches ETF analyst ratings for 250 funds - Investment News
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October 20, 2016 | Permalink
Fund Name: NorthStar/Townsend Institutional Real Estate Fund Inc.
Adviser: Townsend Holdings LLC
Sub-Adviser(s): NSAM B-TCEF Ltd.
Fees: 1.5% Management Fee
Open- or Closed-End: Closed-End (Quarterly repurchase)
Investor Restrictions: $2,500 minimum initial investment, $100 minimum subsequent investment (Class A and C); $25,000 minimum initial investment (Class I)
Filing Date: Oct. 19, 2016
Effective Date: Pending
   
Fund Name: First Trust Senior Floating Rate 2022 Target Term Fund
Adviser: First Trust Advisors L.P.
Sub-Adviser(s): None
Fees: Not specified
Open- or Closed-End: Closed-End (Exchange traded)
Investor Restrictions: None specified
Filing Date: Oct. 14, 2016
Effective Date: Pending
   
Fund Name: Nuveen Preferred & Income 2022 Term Fund
Adviser: Nuveen Fund Advisors LLC
Sub-Adviser(s): Nuveen Asset Management LLC
Fees: Not specified
Open- or Closed-End: Closed-End (Exchange traded)
Investor Restrictions: None specified
Filing Date: Oct. 11, 2016
Effective Date: Pending
   
Fund Name: Nuveen Credit Opportunities 2024 Target Term Fund
Adviser: Nuveen Fund Advisors LLC
Sub-Adviser(s): Symphony Asset Management LLC
Fees: Annual management fee to a maximum of 0.7% of the fund's average daily managed assets.
Open- or Closed-End: Closed-End (Exchange traded)
Investor Restrictions: Minimum investment of 100 common shares
Filing Date: Oct. 3, 2016
Effective Date: Pending
   
Fund Name: Nuveen Credit Opportunities 2022 Target Term Fund
Adviser: Nuveen Fund Advisors LLC
Sub-Adviser(s): Symphony Asset Management LLC
Fees: Annual management fee to a maximum of 0.7% of the fund's average daily managed assets.
Open- or Closed-End: Closed-End (Exchange traded)
Investor Restrictions: Minimum investment of 100 common shares
Filing Date: Oct. 3, 2016
Effective Date: Pending
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October 14, 2016 | Permalink
The SEC appointed Melissa Hodgman as associate director in the Enforcement Division, succeeding Stephen L. Cohen, who left the SEC in June. Hodgman joined the Enforcement Division in 2008 as a staff attorney, moving to the Market Abuse Unit in 2010 and rising to assistant director in 2012.
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October 13, 2016 | Permalink
The SEC voted to adopt changes to modernize and enhance the reporting and disclosure of information by registered investment companies and to enhance liquidity risk management by open-end funds, including mutual funds and ETFs. Registered funds will be required to file a monthly portfolio reporting form (Form N-PORT) and an annual reporting form (Form N-CEN) that will require census-type information. The rules also will require enhanced and standardized disclosures in financial statements and will add new disclosures in fund registration statements relating to a fund’s securities lending activities. Finally, the rules will also promote effective liquidity risk management across the open-end fund industry and will enhance disclosure regarding fund liquidity and redemption practices.
Related News:
SEC approves fund liquidity rule but carves out exemptions for ETFs - Investment News (reg. req.)
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October 11, 2016 | Permalink
The SEC filed 868 enforcement actions exposing financial reporting-related misconduct by companies and their executives and misconduct by registrants and gatekeepers in FY 2016. The agency released the annual update of its enforcement actions, which reached a single-year high for the fiscal year ended Sept. 30, including the most ever cases involving investment advisers or investment companies (160) and the most ever independent or standalone cases involving investment advisers or investment companies (98). FCPA-related enforcement actions also hit new highs (21), as did money distributed to whistleblowers ($57 million). The agency brought a record 548 standalone or independent enforcement actions and obtained judgments and orders totaling more than $4 billion in disgorgement and penalties.
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October 9, 2016 | Permalink
Despite the significant growth of liquid alternative mutual funds - from just 132 managing $32.6 billion at the end of 2006 to 484 managing $171.6 billion today - the strategies have made little headway into the portfolios of company-sponsored retirement plans, a segment that could be a prime candidate for alternative investment options. The largely bull market that has persisted in recent years may have contributed to their inability to break through, with one analyst estimating alts account for less than 1% of company-sponsored plans. Education and access to alternatives remain the largest barriers to funds expanding their presence in this potential growth area.
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October 6, 2016 | Permalink
Fund Name: Nuveen Credit Opportunities 2024 Target Term Fund
Adviser: Nuveen Fund Advisors LLC
Sub-Adviser(s): Symphony Asset Management LLC
Fees: Annual management fee to a maximum of 0.7% of the fund's average daily managed assets.
Open- or Closed-End: Closed-End (Exchange traded)
Investor Restrictions: Minimum investment of 100 common shares
Filing Date: Oct. 3, 2016
Effective Date: Pending
   
Fund Name: Nuveen Credit Opportunities 2022 Target Term Fund
Adviser: Nuveen Fund Advisors LLC
Sub-Adviser(s): Symphony Asset Management LLC
Fees: Annual management fee to a maximum of 0.7% of the fund's average daily managed assets.
Open- or Closed-End: Closed-End (Exchange traded)
Investor Restrictions: Minimum investment of 100 common shares
Filing Date: Oct. 3, 2016
Effective Date: Pending
   
Fund Name: Nuveen Credit Opportunities 2020 Target Term Fund
Adviser: Nuveen Fund Advisors LLC
Sub-Adviser(s): Symphony Asset Management LLC
Fees: Annual management fee to a maximum of 0.7% of the fund's average daily managed assets.
Open- or Closed-End: Closed-End (Exchange traded)
Investor Restrictions: Minimum investment of 100 common shares
Filing Date: Oct. 3, 2016
Effective Date: Pending
   
Fund Name: ACA/Prism Multi-Strat Alternatives Fund
Adviser: Crow Point Partners LLC
Sub-Adviser(s): Alternative Capital Advisers LLC
Fees: Advisory fee at the annual rate of 0.75% of the fund's average daily gross invested assets; The Adviser will also receive a fulcrum fee of between 0% and 1.50%, calculated using an annual base advisory fee rate of a specified amount of the average daily net assets of the Fund, adjusted by the Fund’s performance over a rolling 12-month period relative to the HFRI Fund of Funds Conservative Index.
Open- or Closed-End: Closed-End (Quarterly repurchase)
Investor Restrictions: $25,000 minimum initial investment; $10,000 minimum subsequent investment
Filing Date: Sept. 13, 2016
Effective Date: Pending
   
Fund Name: TCW Diversified High Income 2021 Target Term Fund
Adviser: TCW Investment Management Company LLC
Sub-Adviser(s): None
Fees: Not specified
Open- or Closed-End: Closed-End (Exchange traded)
Investor Restrictions: Minimum investment of 100 common shares
Filing Date: Aug. 30, 2016
Effective Date: Pending
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October 4, 2016 | Permalink
Alternative investment firm 361 Capital will acquire long-only manager BRC Investment Management and has already filed to launch a small-cap equity mutual fund to be managed by BRC, which currently manages approximately $800 million. The small-cap fund will join 361's lineup of five alternative-strategy mutual funds, with $1.3 billion in assets. It is hoped the deal, expected to close by Oct. 31, will leverage 361's distribution capabilities and BRC's access to institutional investors.
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October 4, 2016 | Permalink
MUFG Investor Services closed its acquisition of Rydex Fund Services from Guggenheim Investments, the global asset management and investment advisory business of Guggenheim Partners. MUFG, the global asset servicing group of Mitsubishi UFJ Financial Group, agreed in July to acquire Rydex, Guggenheim's 1940-Act mutual fund administration business. The acquisition will expand MUFG's full service offering for alternative investment managers, adding regulated 1940-Act mutual fund and ETF services to a service proposition including single manager, fund of hedge fund, private equity and traditional asset managers. Financial details weren't made public.
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October 2, 2016 | Permalink
BlackRock came out in favor of proposals by global regulators to introduce more stringent stress tests on mutual funds. The Financial Stability Board proposed regular stress testing of individual funds in June in a bid to ensure asset managers possess sufficient means to meet withdrawal requests from investors. However, Vanguard argued asset managers should be left to carry out their own stress tests without the involvement of regulators. This stance is supported by the Securities Industry and Financial Markets Association.
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