Remarks at the October 28, 2021 Meeting of the Asset Management Advisory Committee

Good morning and welcome to this meeting of the Asset Management Advisory Committee.

Before I start, I would like to remind you that I am speaking only for myself and not for the Commission, the Commissioners, or the staff.[1]

For this penultimate meeting of the AMAC, I understand that the Committee will complete its overview of the subjects two subcommittees have been exploring to propose final recommendations at its last meeting. The staff is looking forward to learning from the presentations of the Small Advisers and Small Funds Subcommittee and the Evolution of Advice Subcommittee.

The staff has been reviewing market participants’ feedback on the Commission’s request for comment on digital engagement practices. [2] As Chair Gensler mentioned recently, today, asset managers — both incumbents and fintech startups — can tailor marketing and products to individual investors, using predictive data analytics and other digital engagement practices. The staff is in particular interested in evaluating if predictive data analytics algorithms maximize investor returns, or, to the extent that they’re also maximizing revenues, the staff is interested in knowing how to address the potential conflicts of interests that arise in those situations.  The staff is also more broadly interested in how fintech can enhance the investor experience while also managing any new risks and conflicts of interest the use of fintech can create. 

From the Small Advisers and Small Funds Subcommittee, I look forward to learning more about the challenges these entities face as they seek to compete in the asset management marketplace.  In any rulemaking, the Commission is generally required to consider the effects of our rulemaking on small entities and to consider, among other matters, significant alternatives that would accomplish our stated objective, while minimizing any significant adverse impact on small entities.  This subcommittee’s work could broadly inform the Commission in these areas.

I would like to thank Commissioner Crenshaw for their participation today.  My thanks also to Ed Bernard for his leadership and to all subcommittee leaders and Committee members for their contributions. I would also like to thank Christian Broadbent, Jay Williamson, Jessica Shin, Neil Lombardo and other Division staff who continue to support the Committee. Thank you also to the Division’s Managing Executive Office and the Commission’s Office of Information Technology for enabling us to meet virtually. With that, Ed I turn it over to you and I look forward to the discussion.