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Division of Investment Management: Conference on Emerging Trends in Asset Management Introduction

William A. Birdthistle

William Birdthistle
Director, Division of Investment Management

Washington D.C.

May 19, 2023

Thank you very much for your warm welcome of our guests to the SEC, Brent, and for your kind introduction. I’m delighted to add my voice to yours to greet all of our Commission coworkers here sitting directly in front of us as well as all our industry colleagues and even broader audience viewing online.

Before we begin, I must remind you all that my remarks today are provided in my official capacity as the Commission’s Director of the Division of Investment Management but they do not necessarily reflect the views of the Commission, the Commissioners, or members of the staff.

As a recovering academic, I find the appeal of a conference to be clear, almost self-evident. Conferences exist to promote the transmission of ideas, to serve as events where we bring together disparate constituents to participate in a broader, enlightening conversation. To teach one another, to provoke thoughts, to challenge assumptions, and to germinate as abundant a discourse as possible on the central questions of the day. Or, indeed, of the days ahead.

And in the days behind, conferences – as well as their predecessor councils, diets, symposia, and so on – stretch far back into history. Who can forget the First Council of Nicaea of 325 A.D., which tried to elucidate things begotten versus things made? We in the broader investment management community revisited this topic in our own way 1,686 years later in Janus versus First Derivative Traders, when an investment adviser disagreed with the claim that they had “made” misstatements in a fund’s prospectus.[1] Or the Peace of Westphalia in 1648, when 109 delegations convened to negotiate the end of the Thirty Years War. A helpful model perhaps for FSOC deliberations. In more recent memory, the famous conferences of World War II at Potsdam, Yalta, and others might come to mind. During that same era, the United States, the United Kingdom, and other allied nations also indulged in a conference at Bretton Woods to envision the foundation of a postwar international economy from which the International Monetary Fund and the World Bank were born.

While today’s conference may not leave quite as indelible of a mark on the tomes of history as the conferences I’ve mentioned, I hope it is received by you all as a sincere invitation from me and the staff of the Division of the Investment Management for discourse and engagement on important topics of our day in asset management. In his study of the history of the administrative state, William Novak advanced the idea that administrative law and agencies, such as the SEC, have a unique and important role to play in the relationship between government and the American public.[2] I wholeheartedly agree with Novak’s contention that administrative law lies at the intersection of private and public discourse on many important issues that comprise our everyday political, social, economic, and financial lives – all the way into to our retirement accounts.

As a public servant, the need to speak directly with citizens and the entities whom we regulate is paramount. Our duty, among others, is to hear petitions to the Government for redress of grievances.[3] We listen to our share of those. And we are eager to do so. Each year, indeed each week, SEC staff interact with a broad census of stakeholders in the capital markets. As helpful as those discussions are, there is also value in having conversations take place in public, in a venue such as this, for the benefit of all willing listeners.

These days, the need to come together is particularly acute, as we continue the national process of returning to something aspiring to pre-pandemic normality. Indeed, this year’s event straddles phases of the pandemic, as our hybrid structure dates from the planning we began before staff had returned to the office. The human experience benefits, I think, from encounters with friends and colleagues – and also those with different points of view. Unremitting isolation, certainly, is no balm for the soul nor mode of intellectual flourishing.

When we are busy, as so many of us are, we can focus on the abundance of details and minutiae of our day. That concentration can be a useful tool in accomplishing things, including the work of the people of the United States. But maintaining a broader perspective can be a valuable lodestar for navigating a true course to the most important goals of our mission. To that end, inviting comment and observations from academics, industry experts, outside legal practitioners, and others who care about our work is a great way to be reminded of the larger picture, the longue durée, and the emerging trends of our field. I thank all of our participants today for their willingness to contribute their thoughts to the work we do and, perhaps, to the work they think we ought to be doing.

All institutions are susceptible to myopia in the absence of colloquy with independent sources. So, all institutions benefit from hearing outside voices with different, unique perspectives.

Thus, our vision for this conference – and long may it bloom – is to promote greater discourse between the Division of Investment Management and the array of communities who comprise the $110 trillion in regulatory assets under management that we oversee. We seek to benefit from the insights of those who think about the future of these trillions and the dreams and aspirations of our fellow citizens that all that treasure represents.

We hope to learn your views on the threats to that universe, the opportunities ahead of us, and how we can best serve the people of the United States.

Not so long ago, I was an outside voice, watching the work of the Commission closely, and developing fervent if largely ill-informed views of the agency. Though I’ve now been here a while, I do recall a few first impressions and lessons learned from my first 16 months in the job.

Perhaps the key lesson came from penetrating the wall of clichés one hears from time to time about the administrative state and those who staff it. Not only do those erroneous claims besmirch a cohort of dedicated civil servants, they malign an astonishingly effective system of governance. In my short time in government, I have been deeply impressed by the excellence and integrity of the staff at this agency, particularly, of course, my colleagues in the Division of Investment Management.

Historians of the administrative state, such as Professor Novak, whom I mentioned earlier, remind us of the unique capabilities that agencies have to interact directly with broader swaths of the American public, to furnish a government responsive to comments of our fellow citizens.[4] I have had many colleagues remind me of the persistent need to be open to all voices, to listen to those who follow our work – and importantly – to those who disagree with it. I have yet to see a member of our staff decline or shy from difficult meetings or unpleasant conversations.

Having worked at a few law firms and spent time on one or two law faculties, I have been deeply impressed by the diligent work ethic of my colleagues here, and their superlative legal acumen. Indeed, I’m not sure I’ve ever worked at a more impressive law firm or served on a more intellectually curious legal faculty than the Division of Investment Management. It’s odd to know within days of taking a new job – particularly when afflicted by something of a misguided sense of one’s own youth – that it is already going to be the pinnacle of one’s career.

I am incredibly proud of the Division’s work in the first 16 months of my tenure. During that time, IM’s rulemaking staff have drafted rule proposals and form amendments intended to enhance the regulation of private fund advisers, improve the resiliency of money market funds, set guardrails for cybersecurity risk management, and strengthen Names Rule and ESG Fund disclosures.[5] IM rulemaking staff have also helped steward to adoption rules enhancing Form PF disclosure, fund proxy voting disclosures, and fund shareholder reports.[6] Of course, rule writing is far from the only work we do in the Division. Our Chief Counsel’s Office has grappled tenaciously with many challenging interpretive questions and multiple rule implementations in the past year. And our Disclosure Review Staff are often the first to astutely identify such novel or complex legal and accounting questions among the thousands of filings they carefully and thoughtfully review. Also, our Analytics Office is held in extremely high regard for its market monitoring capabilities and shrewd financial analysis which ensures that the Division remains cognizant of the latest developments in the asset management industry. Finally, the Managing Executive’s Office is responsible for ensuring that all of us are able to do our jobs effectively. Including by providing us with the ability to host events like our conference today.

Across each of these offices, IM staff dutifully discharge their duties, all while heeding – indeed, incorporating the lessons of – major geopolitical events and profound market dislocations, which serve as poignant reminders of how critical it is that we apprise ourselves of emerging trends in pursuing our mission.

Seeing this conference come to fruition is certainly one of the highlights of my experience as Division Director thus far. Like any conference, it was many months and lots of hard work in the making. I would like to express my profound gratitude to Jennifer McHugh, to Chris Perry, and to Veronica Davis for their herculean efforts to make this event possible. I would also like to thank IM’s esteemed Senior Officers and Jennifer McHugh for serving as moderators and speakers and leading us through what I’m sure will be a day brimming with thought-provoking discourse. I look forward to hearing many interesting observations and lessons from all of our speakers today.

But first, let me enjoy the great privilege of introducing our next speaker, the Chair of the Securities and Exchange Commission, Gary Gensler. Chair Gensler was himself, not so long ago, a member of the academy, serving as a professor of Global Economics and Management at MIT’s Sloan School of Management from 2018 until he assumed the leadership of the SEC in 2021.

There is a great deal to read online about the Chair’s biography and career, particularly his many years of public service, but let me speak for just a moment about his commitment to our work in Investment Management. As I’m sure many of you are well-aware, the Chair’s agenda certainly reflects the reality that the asset management space is perhaps the domain most critical to the prosperity of individual Americans under the Commission’s oversight. Today, registered investment companies report more than $30 trillion in net assets in the United States,[7] and 15,000 registered investment advisers report more than $110 trillion in regulatory assets under management.[8] I share the Chair’s conviction that funds and their advisers are critical agents for advancing the tripartite mission of the Securities and Exchange Commission.

Chair Gensler, welcome to the conference and thank you for joining us.

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[1] See generally Janus Capital Grp., Inc. v. First Derivative Traders, 131 S. Ct. 2296, 2302 (2011).

[2] See generally William Novak, The Legal Origins of the Modern American State, in Looking Back at Law's Century 249 (Austin Sarat et al. eds. 2002) (“Novak”).

[3] See generally U.S. Const. art. I.

[4] See generally Novak, supra note 2.

[5] See Proposed Rule: Private Fund Advisers; Documentation of Registered Investment Adviser Compliance Reviews, Investment Advisers Act Rel. No. 5955 (Feb. 9, 2022),available at; Proposed Rule: Money Market Fund Reforms, Investment Company Act Rel. No. 34-441 (Dec. 15, 2021),available at; Proposed Rule: Cybersecurity Risk Management for Investment Advisers, Registered Investment Companies, and Business Development Companies, Rel. No. 33-11028 (Feb. 9, 2022),available at; Proposed Rule: Investment Company Names, Rel. No. IC-34593 (May 25, 2022),available at; Proposed Rule: Enhanced Disclosures by Certain Investment Advisers and Investment Companies about Environmental, Social, and Governance Investment Practices, Rel. No. No. IA-6034 (May 25, 2022), available at

[6] See generally Final Rule: Amendments to Form PF to Require Event Reporting for Large Hedge Fund Advisers and Private Equity Fund Advisers and to Amend Reporting Requirements for Large Private Equity Fund Advisers, Rel. No. IA-6297 (May 3, 2023), available at; Final Rule: Enhanced Reporting of Proxy Votes by Registered Management Investment Companies; Reporting of Executive Compensation Votes by Institutional Investment Managers, Rel. No. IC-34745 (Nov. 2, 2022), available at; Final Rule: Tailored Shareholder Reports for Mutual Funds and Exchange-Traded Funds; Fee Information in Investment Company Advertisements, Rel. No. 33-11125 (Oct. 26, 2022),available at

[7] Based on staff analysis of aggregate average net assets reported on Form N-CEN as of April 24, 2023.

[8] Registered investment advisers report $114 trillion in regulatory assets under management, based on analysis of data reported on Form ADV through the Investment Adviser Registration Depository (IARD) system as of December 31, 2022. The data consists of assets that are reported by both advisers and sub-advisers, including mutual fund and ETF assets.

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