Division of Investment Management
Aug. 1, 2013
The Division of Investment Management (Division) works to protect investors, promote informed investment decisions and facilitate appropriate innovation in investment products and services through regulating the asset management industry. The Division is responsible for the Commission's regulation of investment companies, variable insurance products, and federally registered investment advisers. Types of investment companies include mutual funds, closed-end funds, business development companies, unit investment trusts, and exchange-traded funds.
The Division carries out its mission by focusing primarily on guidance, disclosure, rulemaking, and risk monitoring and analysis. Its work is generally performed by the following offices:
- Guidance – Chief Counsel’s Office
- Disclosure – Disclosure Review and Accounting Office
- Rulemaking – Rulemaking Office
- Risk Monitoring – Risk and Examinations Office
The Chief Counsel’s Office (CCO) is primarily responsible for issuing no-action letters, interpretive letters and other guidance under the Investment Company Act of 1940 (Investment Company Act), the Investment Advisers Act of 1940 (Investment Advisers Act) and their related rules, and under other federal securities laws that affect the asset management industry. CCO also reviews and analyzes applications requesting exemptive orders under the Investment Company Act and the Investment Advisers Act and drafts the Commission releases related to those applications.
The CCO also responds to interpretive and legal questions concerning the Investment Company Act, the Investment Advisers Act, and other federal securities laws that affect the asset management industry. In addition, the CCO reviews proposed rulemakings by the Division and other divisions in the Commission, and also reviews registration statements referred to the Division for status and other issues under the Investment Company Act and the Investment Advisers Act. In consultation with staff across the Division, CCO also prepares Congressional testimony and reviews and assists in drafting proposed legislation and responding to Congressional inquiries. The CCO also provides consultative assistance to non-U.S. securities regulators and various international bodies, including the International Organization of Securities Commissions and the Financial Stability Board, on international matters relating to the asset management industry.
The CCO also handles tips, complaints, and referrals. Within the CCO, the Enforcement Liaison Office (ELO) provides legal guidance and advice to the Division of Enforcement on investigations that involve potential violations of the Investment Company Act and the Investment Advisers Act, or that relate to the Division's policies and programs. The ELO also advises the Division of Enforcement on applications submitted by barred individuals to re-enter the financial services industry; reviews requests from defendants or respondents that advise or underwrite specialized investment companies seeking relief from automatic disqualifications that are triggered by enforcement actions; and reviews new or amended investment adviser registration forms to identify disciplinary events that might warrant de-registration or enforcement action.
The Disclosure Review and Accounting Office (DRAO) is primarily responsible for the analysis and review of investment company and variable insurance filings under the Federal securities laws, as well as filings for other investment products issued by insurance companies. These responsibilities include the review of initial registration statements, post-effective amendments thereto, proxy statements, and the review of financial statements as required by the Sarbanes-Oxley Act of 2002. DRAO is also responsible for other aspects of the regulation of variable annuities and variable life insurance under the Federal securities laws. This includes responding to requests for information and guidance, recommending rules, and providing technical assistance on legislation.
The DRAO’s Chief Accountant's Office is responsible for: (1) providing advice to help ensure the full and fair disclosure of financial information by investment companies, variable insurance products, and investment advisers; (2) rendering interpretations as to the meaning and application of rules relating to the form and content of financial statements required to be filed by investment companies, variable insurance products, and investment advisers; and (3) recommending the establishment, in collaboration with the Commission's Office of the Chief Accountant, of sound and uniform standards of auditing and accounting procedures and practices with respect to investment companies, variable insurance products, and investment advisers.
The Rulemaking Office reviews and considers whether the Commission should propose, adopt, or amend rules and forms under the Investment Company Act, the Investment Advisers Act, and other federal securities laws that affect the asset management industry. The Rulemaking Office also makes recommendations to the Commission on rulemaking initiatives as appropriate, and provides technical assistance on the interpretation and application of recent rulemakings. In consultation with staff across the Division, the Rulemaking Office also prepares Congressional testimony and reviews and assists in drafting proposed legislation and responding to Congressional inquiries.
The Division’s Risk and Examinations Office (REO) monitors trends in the asset management industry and carries out the Division’s inspection and examination program. REO pursues its mission by: (1) managing, monitoring, and analyzing the industry data the Division gathers; (2) providing ongoing financial analysis of the asset management industry; (3) gathering and analyzing operational information directly from participants in the asset management industry, including in particular the risk-taking activities of investment advisers and investment companies; and (4) otherwise maintaining industry knowledge and technical expertise to provide other analyses that may support the Division's activities.