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All posts by Burton Keller

L. Burton Keller was a principal founder of the company in 1985 and currently focuses on strategic initiatives for the company. Mr. Keller is a former member of the Bank, Trust and Retirement Advisory Committee of the Investment Company Institute. He has served on numerous committees and task force groups with the ICI over the last 17 years including Co-chair of the Dividend Distribution Task Force.

15 Years Since Market Timing Scandal – My Perspective

2018 marks the 15th year since the mutual fund industry was rocked by the worst scandal in its history: the market timing scandal. It was in September of 2003 when New York Attorney General Eliot Spitzer filed a complaint against the hedge fund Canary Capital Partners — charging they had engaged in “late trading” in collusion with a mutual fund in order to market time their trading in the fund. This was quickly followed by more charges by the New York AG as well as the SEC charging numerous mutual fund companies with allowing market timing in their funds. This scandal became a black eye for an industry that had a fairly strong track record of avoiding scandal. Read more

Burton Keller

L. Burton Keller was a principal founder of the company in 1985 and currently focuses on strategic initiatives for the company. Mr. Keller is a former member of the Bank, Trust and Retirement Advisory Committee of the Investment Company Institute. He has served on numerous committees and task force groups with the ICI over the last 17 years including Co-chair of the Dividend Distribution Task Force.

President Signs Executive Order on Strengthening Retirement Security

On August 31, 2018, President Trump signed an Executive Order on Strengthening Retirement Security in America. This EO directs the US Department of Labor and the Treasury to consider issuing regulations and guidance that would (1) make it easier for businesses to offer association retirement plans, also known as multiple employment plans (MEP), (2) improve the effectiveness of and reduce costs of furnishing required plan notices and disclosures, to include broader use of electronic delivery, and (3) update life expectancy and distribution period tables for purposes of required minimum distributions. Read more

Burton Keller

L. Burton Keller was a principal founder of the company in 1985 and currently focuses on strategic initiatives for the company. Mr. Keller is a former member of the Bank, Trust and Retirement Advisory Committee of the Investment Company Institute. He has served on numerous committees and task force groups with the ICI over the last 17 years including Co-chair of the Dividend Distribution Task Force.

Industry Still Working Through Liquidity Rule Bucketing Methods

As a firm dedicated to helping funds and distributors “stay ahead of the change,” we’ve been following the liquidity rule closely over the past year. Starting in the late fall of last year when ICI sent a letter to the SEC urging the regulator to delay the compliance date, to February of 2018 when the SEC did elect to grant firms a one-year extension, and continuing to present day where fund shops are in the midst of formalizing the processes needed to comply. Read more

Burton Keller

L. Burton Keller was a principal founder of the company in 1985 and currently focuses on strategic initiatives for the company. Mr. Keller is a former member of the Bank, Trust and Retirement Advisory Committee of the Investment Company Institute. He has served on numerous committees and task force groups with the ICI over the last 17 years including Co-chair of the Dividend Distribution Task Force.

Kicking the Can (or Buckets) Down the Road – Liquidity Rule Delayed Six Months

The SEC voted on Wednesday to delay the compliance date of the classification requirement of the Liquidity Rule in what turned out to be a whirlwind of a week for the regulatory body.

With a delay now formalized, fund firms with more than $1 billion in assets now have till June 1, 2019, to comply with the classification requirements, while smaller firms have till Dec. 1, 2019. The SEC also issued an FAQ document detailing compliance requirements for the rule, which you can find here. The other requirements of the rule still go into effect December 1, 2018, for large funds and June 1, 2018, for smaller funds. Read more

Burton Keller

L. Burton Keller was a principal founder of the company in 1985 and currently focuses on strategic initiatives for the company. Mr. Keller is a former member of the Bank, Trust and Retirement Advisory Committee of the Investment Company Institute. He has served on numerous committees and task force groups with the ICI over the last 17 years including Co-chair of the Dividend Distribution Task Force.

The Best Plan for a Potential Liquidity Rule Delay? Plan for No Delay

There have been multiple developments suggesting that Rule 22e-4 (“the liquidity rule”) is likely to be significantly watered down or, at least, delayed. Earlier this month, ICI sent a letter to the SEC urging the regulator to delay the compliance date by a year to ensure firms are well prepared. This postponement would appear to be in the industry’s best interest, given that a recent survey of 220 CCOs across the industry revealed that 90% of them were less than halfway through preparations to comply with the rule. Read more

Burton Keller

L. Burton Keller was a principal founder of the company in 1985 and currently focuses on strategic initiatives for the company. Mr. Keller is a former member of the Bank, Trust and Retirement Advisory Committee of the Investment Company Institute. He has served on numerous committees and task force groups with the ICI over the last 17 years including Co-chair of the Dividend Distribution Task Force.

The GOP’s Tax Reform: Retirement Plans Safe (for Now)

The House finally released a draft of their tax reform plan, and for right now, it looks like they will be leaving 401(k) contributions alone. Back in April, I wrote about how the Trump administration was looking at changing the deductibility of 401(k) deferrals as a way to fund their projected reduction in tax revenue. The administration was thinking about changing 401(k) contributions from being tax-deferred to being after-tax Roth style contributions. Their five-year projection indicated this would save up to 583 billion dollars over the next 5 years. Read more

Burton Keller

L. Burton Keller was a principal founder of the company in 1985 and currently focuses on strategic initiatives for the company. Mr. Keller is a former member of the Bank, Trust and Retirement Advisory Committee of the Investment Company Institute. He has served on numerous committees and task force groups with the ICI over the last 17 years including Co-chair of the Dividend Distribution Task Force.

Throwback Thursday – Tax Reform and Taxing 401K Plan Contributions

Last April I wrote a piece on what a bad idea I thought it was to Rothify 401K plans (see “Trump Administration Looking at Changing the 401K Tax Rules“). As you probably know already, participant 401k contributions are taken out of your pay before federal and state income taxes. They are taxed for FICA but not for income tax purposes. Then when you withdraw the funds, they and the income earned is taxable. The current administration is considering making 401k contributions work like Roth plans work today where you contribute after tax dollars, but when you withdraw your funds at retirement, they are tax-free, including the income. The purpose behind changing the rules would be to raise income taxes to support other spending initiatives by the administration. In other words, if they are successful in changing the law, the billions of dollars contributed each year to 401k plans would all of a sudden become subject to income taxes. The Joint Committee on Taxation has shown that the tax preferred treatment of defined contribution plans will cost 58.6 billion in foregone revenue between 2016 and 2020. Read more

Burton Keller

L. Burton Keller was a principal founder of the company in 1985 and currently focuses on strategic initiatives for the company. Mr. Keller is a former member of the Bank, Trust and Retirement Advisory Committee of the Investment Company Institute. He has served on numerous committees and task force groups with the ICI over the last 17 years including Co-chair of the Dividend Distribution Task Force.

401(k) tax rules

Trump Administration Looking at Changing the 401(k) Tax Rules — Very Bad Idea

The Trump administration has been clear in stating its objective to reduce individual and corporate tax rates. But to fund the reduction in tax revenue, one of the items they are looking at changing is the deductibility of employee 401(k) deferrals. The Joint Committee on Taxation, which acts as an advisor to Congress with research on the tax code, has shown that tax-preferred treatment of defined contribution plans will cost 583.6 billion in foregone revenue between 2016 and 2020. This could be very tempting for congress as it looks at ways to fund the tax cuts. Choosing to change the 401(k) tax rules by doing away with the tax deferral benefits of employee 401(k) contributions would be shortsighted and very harmful to the retirement system in the US.

Read more

Burton Keller

L. Burton Keller was a principal founder of the company in 1985 and currently focuses on strategic initiatives for the company. Mr. Keller is a former member of the Bank, Trust and Retirement Advisory Committee of the Investment Company Institute. He has served on numerous committees and task force groups with the ICI over the last 17 years including Co-chair of the Dividend Distribution Task Force.

FSOC’s Future Under the New Administration

Almost a year ago I posted a blog entitled SEC, Dodd Frank, Money Market Reform and FSOC: Connecting the Dots Between the Acronyms. In the post, I expressed my dismay with the passing of the Money Market Reform (MMR) laws, and how it seemed to me that the cure was worse than the disease it was trying to cure. Typically, the SEC does an OK job at assuring us with cost/benefit analysis of its rules. However, something about the MMR rule did not feel right, so I decided to do a little research on how the MMR rule came to be. Read more

Burton Keller

L. Burton Keller was a principal founder of the company in 1985 and currently focuses on strategic initiatives for the company. Mr. Keller is a former member of the Bank, Trust and Retirement Advisory Committee of the Investment Company Institute. He has served on numerous committees and task force groups with the ICI over the last 17 years including Co-chair of the Dividend Distribution Task Force.

Will Swing Pricing Be DOA?

The SEC, as part of their initiative around the new liquidity rule, has given the green light for funds to implement Swing Pricing. For those not familiar with the Swing Pricing concept, basically it allows a fund to bump up or down their end of day NAV to help cover their increased transactional costs when market volatility causes higher than normal purchases or redemptions. It will be voluntary for a fund company if they want to implement Swing Pricing. Funds are prohibited from implementing it until November 19, 2018, in order to give those funds that do not have experience with Swing Pricing time to implement needed system changes. Swing Pricing is popular in Europe and those funds with a presence in Europe would perhaps have an advantage in being able to implement earlier than other funds, hence the delayed date.

Read more

Burton Keller

L. Burton Keller was a principal founder of the company in 1985 and currently focuses on strategic initiatives for the company. Mr. Keller is a former member of the Bank, Trust and Retirement Advisory Committee of the Investment Company Institute. He has served on numerous committees and task force groups with the ICI over the last 17 years including Co-chair of the Dividend Distribution Task Force.

Mutual Fund Data Management Whitepaper (for Distributors)

Our Mutual Fund Data Management Whitepaper is a thought piece authored by Whitfield Athey, CEO and Burton Keller, EVP, of Delta Data, that addresses the unique data elements and key functionality that should be considered when acquiring or building an enterprise data management system designed to accommodate the unique needs of pooled investments – with focus on mutal funds.

Click here and complete a simple form to download the whitepaper.

 

Burton Keller

L. Burton Keller was a principal founder of the company in 1985 and currently focuses on strategic initiatives for the company. Mr. Keller is a former member of the Bank, Trust and Retirement Advisory Committee of the Investment Company Institute. He has served on numerous committees and task force groups with the ICI over the last 17 years including Co-chair of the Dividend Distribution Task Force.

SEC Guidance Paper is a Heads Up for Potential Avalanche of Filings

In light of the upcoming DOL Rule, the SEC recently issued guidance to funds on disclosure issues and certain procedural requirements with offering variations in fund sales loads and new share classes. The SEC IM Guidance Update appears to be an attempt by the SEC to not only provide needed guidance to funds, but to also to alleviate for SEC staff what could become an avalanche of new filings. Read more

Burton Keller

L. Burton Keller was a principal founder of the company in 1985 and currently focuses on strategic initiatives for the company. Mr. Keller is a former member of the Bank, Trust and Retirement Advisory Committee of the Investment Company Institute. He has served on numerous committees and task force groups with the ICI over the last 17 years including Co-chair of the Dividend Distribution Task Force.