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Opening Remarks at the November 5, 2020 Special Meeting of the Asset Management Advisory Committee

Nov. 5, 2020

I would like to welcome everyone to today’s Special Meeting of the Commission’s Asset Management Advisory Committee, or AMAC.[1]  Thank you to Mark Tibergien for his service on the Committee since its inception, and welcome to Renee LaRoche-Morris, the Committee’s newest member.  I know Renee will provide important insights to the Committee from her years of experience.  And, to follow up on a point Ed [Bernard] just made, one thing we really like about our advisory committees is the extent to which they provide a way for committee members to work with our staff, who provide their expertise and experience to facilitate the committees’ efforts.  This engagement is good for us, I hope good for the Committee members and those who present to the Committee and, ultimately, facilitates a better common understanding of our markets and the needs of our investors.  Thank you to the staff who work so closely with the members of the AMAC and with the members of the public who engage with the Commission through the AMAC.    

Today’s agenda, though discrete, is important, and I thank everyone participating, including the members of the AMAC, my fellow commissioners, and all those listening to our meeting through the Commission’s website.  The unprecedented and unanticipated effects of COVID-19 have required asset managers and other market participants to adjust their business operations, including initiating and following business continuity plans and, in many cases, by shifting employees to a remote environment.  Despite some disruptions and associated challenges, this shift has provided market participants with a real-time “stress test” not only of their ability to operate remotely, but also of their ability to do so while complying with regulatory requirements that were designed for an environment with vastly different operational characteristics.  Like other stress tests, planned and unplanned, the test imposed by the effects of COVID-19 has provided lessons and insights to the Commission and to market participants alike. 

Take, for example, electronic delivery of required regulatory documents.  The Commission last comprehensively addressed digital delivery in guidance issued over 20 years ago,[2] and has discussed plans to revisit that guidance.[3]  Among the pandemic’s most obvious disruptions were those challenging firms’ ability to deliver paper documents to investors.  The Commission provided targeted, conditional and temporary relief, and staff provided guidance, that sought to address those challenges and facilitate timely and effective delivery of the required information to investors.[4]  As I explained at your May meeting, the Commission’s relief overall was intended to enable market participants affected by COVID-19, including funds and advisers, to meet the full substance of their regulatory obligations and the expectations of their investors, despite significant operational constraints.[5]  Looking back at that period, the importance of electronic delivery is clear, and I believe the Commission should consider how to best and promptly update our guidance to make it easier for funds, advisers and investors to use electronic delivery, while ensuring that any investor who wants paper delivery remains fully able to receive it.  I stated this view directly on Monday, when I said our efforts to meet the challenges presented by COVID-19 have unquestionably demonstrated that our regulations should not cling to the mails and paper as the default or preferred paradigm for communications.[6]  Similar considerations may apply regarding the other issues that the AMAC is addressing, including remote work, e-authorization and dematerialization of physical security certificates.       

Today’s meeting provides an opportunity for the AMAC to provide particular recommendations for the Commission as we consider how best to apply the lessons and insights that we have gained during this year’s events.  The AMAC discussed many of these issues at meetings earlier this year, and I thank you for providing your recommendations as a timely follow-up to those discussions.

Thank you again to the AMAC for your time both in preparing today’s recommendations and attending today’s meeting.  I look forward to your recommendations.


[1] My remarks are my own and do not necessarily reflect the views of the Commission or my fellow Commissioners.

[2] See Use of Electronic Media, Investment Company Act Release No. 24426 (Apr. 28, 2000), available here; Use of Electronic Media by Broker-Dealers, Transfer Agents, and Investment Advisers for Delivery of Information; Additional Examples under the Securities Act of 1933, Securities Exchange Act of 1934, and Investment Company Act of 1940, Securities Act Release No. 7288 (May 9, 1996), available here; Use of Electronic Media for Delivery Purposes, Securities Act Release No. 7233 (Oct. 6, 1995), available here.

[3] See, e.g., Form CRS Relationship Summary; Amendments to Form ADV, Exchange Act Release No. 86032, Advisers Act Release No. 5247 (June 5, 2019), at n. 678 (“Form CRS Adopting Release”), available here.

[4] See for a discussion of the Commission’s efforts in response to the effects of COVID-19; see also Staff Statement Regarding Temporary International Mail Service Suspensions to Certain Jurisdictions Related to the COVID-19 Pandemic (June 24, 2020), available here

[5] See Chairman Jay Clayton, Remarks at Meeting of the Asset Management Advisory Committee (May 27, 2020), available here.

[6] See Chairman Jay Clayton, Statement on Harmonizing, Simplifying and Improving the Exempt Offering Framework; Benefits to Small and Medium-Sized Business and Their Investors (Nov. 2, 2020), available here.

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