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Division of Investment Management

Division of Investment Management
InvestingLaws and RegulationsSECSec and Regulatory Bodies

What Is the Division of Investment Management?

The Division of Investment Management is a branch of the U.S. Securities and Exchange Commission (SEC) regulating investment funds, professional fund managers, securities research analysts, and investment advisers. The all-encompassing goal of the Division of Investment Management is to shield retail investors from fraud and abuse inside the investment industry.

How the Division of Investment Management Works

The Division Investment Management acts under the authority of federal securities laws, for example, the Investment Company Act of 1940 and the Investment Advisers Act of 1940. One of the primary goals of the division is to safeguard retail investors from fraud and abuse inside the investment industry. A secondary concern is helping industry professionals as they endeavor to consent to some of the time complex and onerous regulations.

The Division Investment Management is charged with creating regulatory policies and directing the registration, disclosures, and advertising of several types of investment companies and their products, including the accompanying:

  • Mutual funds, which are a basket of equities or securities in which different investors pool their cash
  • Exchange traded funds (ETF)s, which contain securities that track an underlying index with the goal reflecting the index, for example, the S&P 500
  • Variable insurance products, which are insurance products with an investment part embedded in them
  • Investment advisers, which perform different duties to assist investors with researching, select, and invest in securities

The Division of Investment Management used to direct open utility holding companies until that oversight was changed with the entry of the Energy Policy Act of 2005. The regulation of utilities was moved to the Federal Energy Regulatory Commission (FERC).

Offices of the Division of Investment Management

Four primary offices carry out the division's four-pronged mission of guidance, disclosure, rulemaking, and analysis.

Chief Counsel's Office (CCO)

The Chief Counsel's Office (CCO) fundamentally deciphers federal securities laws pertinent to the investment management industry. It issues interpretive letters and surveys exemption demands from the regulations sent by investment companies. The CCO makes proposals to the SEC with regards to the choice about whether to grant partial or full exemption from regulatory rules for the investment company.

The CCO likewise offers individualized interpretive guidance to investment professionals seeking to operate inside the limits of federal law. Objections about likely infringement of federal securities laws or division policies go through the CCO.

Disclosure Review and Accounting Office (DRAO)

The Disclosure Review and Accounting Office (DRAO) surveys investment and variable insurance filings like initial registration statements, financial statements, and proxy statements, which are investor disclosures containing data connected with impending choices and changes inside a company.

The DRAO's all the more straightforwardly works with investment companies and advisers to follow disclosure and accounting policies of federal securities laws. In 2018, the DRAO distributed another website that keeps all disclosure references and important forms in a single place to work on the cycle for both investment companies and retail investors. Pages inside the site incorporate Fund Disclosure at a Glance, Accounting and Disclosure Information (ADI), and Disclosure Reference Material.

Analytics Office

The Analytics Office monitors shifts in the investment management industry, furnishing the Division of Investment with current, accurate data on which to base its actions. The Analytics Office makes its risk investigations and estimates publicly accessible. The Analytics office is charged with four areas of obligations:

  • Monitor and dissect the asset management industry data collected by the SEC.
  • Perform financial analysis of the asset management industry.
  • Acquire data straightforwardly from funds, investment companies, and advisors to break down for the benefit of the SEC.
  • Keep up with industry information and technical expertise to act as an expert resource fully intent on aiding any of the continuous SEC activities.

Rulemaking Office

The Rulemaking Office thinks about new and amended rules and forms connected with federal securities laws and for the SEC. The office additionally gives understandings of decisions to the SEC with respect to the asset management sector. The office is in charge of getting ready Congressional declaration and facilitating Congressional requests as necessary.

Features

  • The division administers the registration, disclosures, and advertising of funds and variable insurance products.
  • The overall goal of the division is to safeguard retail investors from fraud and abuse inside the investment industry.
  • A secondary concern is helping industry professionals as they endeavor to follow here and there complex and onerous regulations.
  • The Division of Investment Management is a branch of the SEC that regulates mutual funds, ETFs, and investment advisers and managers.