Alert April 13, 2010

Director of SEC Division of Investment Management Comments on Collective Investment Trusts, Additional Money Market Fund Regulations and the Division’s Review of Derivative Use by Funds

In a speech at a recent investment management industry conference, the Director of the SEC’s Division of Investment Management, Andrew J. Donohue, discussed aspects of the Division's review of derivative use by registered funds and a second phase of money market fund rulemaking announced by the Commission.  Mr. Donohue also indicated that the Division was looking into the manner in which the exception from the definition of investment company under the Investment Company Act of 1940 for collective investment trusts is being relied upon.  He queried whether in certain instances “banks [are] operating merely in custodial or similar capacity while providing a place for an adviser to simply place pension plan assets of its clients” and suggested that the Division might make recommendations to the Commission in this area once the Division completes its review.