Good morning.  I am Natasha Vij Greiner, Director of the SEC’s Division of Investment Management.  It is my honor to welcome all of you to the second annual Conference on Emerging Trends in Asset Management hosted by the SEC’s Division of Investment Management. 

Whether you are attending in-person or watching us on-line through the live webcast—welcome.  We appreciate your interest in the work that we do, and in this Conference’s consideration of emerging trends in asset management.

Before we go further, I need to remind you that my remarks today are in my official capacity as Director of the Division of Investment Management and do not necessarily reflect the views of the Commission, the Commissioners, or other members of the staff. 

On a personal note, today’s conference convenes at a consequential time for me as I just marked my two-month anniversary as the Director of the Division of Investment Management. I have spent 22 years at the Commission in roles spanning the Divisions of Trading and Markets, Enforcement, and most recently Examinations. I am committed to the mission of this agency to serve investors and am eager to continue that work serving in the role as IM Director.

As many of you may know, the Division of Investment Management is responsible for developing regulatory policy affecting investment companies and investment advisers and for administering the Investment Company Act of 1940 and the Investment Advisers Act of 1940.  The Division comprises over 200 public servants across five offices: the Rulemaking Office; the Chief Counsel’s Office; the Disclosure Review and Accounting Office; the Analytics Office; and the Managing Executive’s Office—many of whom have assisted or are participating in today’s conference. Staff within each office play a critical role in fulfilling the Division’s responsibility for making and administering policy that impacts so many stakeholders in the asset management industry.  I can’t say enough about how impressed I am with the staff since joining the Division. Their expertise, professionalism, and collegiality have been a daily inspiration and vital to me hitting the ground running.   

This year marks the SEC’s 90^th Anniversary.  Over the years we have witnessed rapid growth across a thriving asset management industry.  We regulate an industry of more than 15,000 investment advisers collectively reporting approximately $129 trillion in assets under management.[1]  Many of the investment advisers we oversee are advisers to private funds, which have tripled in number (from 30,000 to 90,000) over the past decade.[2]

This year also marks the 100^th anniversary of the formation of the first mutual fund. It’s a milestone in the development of American capital markets that bears reflection:  Pooled investment vehicles have enabled everyday investors to access markets that were otherwise largely inaccessible. At the end of 1940, mutual funds had aggregate assets of $448 million, while commercial banks had $70.7 billion.[3]  Today, registered funds, which include mutual funds, hold more than $32 trillion, and commercial bank total assets are $23 trillion.[4] These investors have a choice of over 12,000 registered funds, of which approximately 9,000 are mutual funds and 3,000 are exchange traded funds.[5]

That is why our work is so critical to the average investor—both today and looking forward.

Millions of people invest in the nation’s securities markets so that they can—

• enjoy a secure retirement,
• pay for educational expenses,
• create a nest egg that can serve as a down payment on a home, or
• seek to achieve their family’s individual financial goals. 

And that brings me to the benefit of hosting a conference like today’s event. The wide spectrum of individuals interested in this conference underscores the broad impact that the work of the SEC in general—and the Division of Investment Management in particular—has on the lives of millions of Americans.  Based on pre-conference registrations, we have received interest from investors; academics; auditing, accounting, and compliance professionals; legal practitioners; asset management executives; and financial market commentators, among others. Their participation is evidence of how the topics we are considering today resonate with a diverse set of stakeholders.

Today’s conference provides the SEC staff the opportunity to hear ideas and insights from outside of our four walls.  As a longtime member of the SEC staff, I can assure you that we value dialogue.  We appreciate different perspectives.  And we are open to diverse points of view.   

While we know that participants want to hear when the SEC speaks, we also recognize how important it is that the SEC listens. We hope to do much of that today. Discussions like today’s conference help inform the staff of how others view the asset management landscape and our work as its regulator.  And importantly, it facilitates discourse among interested stakeholders.

Today’s conference will feature discussions on (1) trends in asset management products and strategies; (2) past, present and future trends – reminding us that we often can contemplate the future by examining the past; and (3) technology-driven trends. We will also hear directly from Andrea Seidt, the Ohio Securities Commissioner; Erica Williams, the Chair of the Public Company Accounting Oversight Board; and Camille Blackburn, the Director of Wholesale Buyside in the Asset Management Division of the U.K. Financial Conduct Authority, who will share their domestic and international regulatory perspectives on emerging trends. These topics reflect many opportunities and challenges facing the asset management industry.

Investments in alternative asset classes are growing. Indeed, over the last several years, private market securities and loans have outpaced registered securities. For example, in 2022, exempt offerings raised $3.7 trillion of new capital, compared to more than the $1.0 trillion raised in registered offerings.[6]  This growth means that investors are increasingly allocating assets to unregistered funds by investing directly through products offered to Accredited Investors or qualified purchasers, or indirectly through investments in pension funds.

This trend is also seen in the growth of our unregistered products and investment vehicles.  For example, the growth in institutional and retail separately managed accounts (SMAs), collective investment trusts (CITs), and other non-registered investment vehicles are rising in popularity, but lack some of the protections of the Investment Company Act of 1940 and the attendant regulatory oversight and associated protections.

In addition, we are eager to further discussions of technology-driven trends. Complex issues surround the use of artificial intelligence, machine learning, and other developing technologies and their potential for greater financial inclusion and efficiency.  The potential for conflicts of interest in this space has led to the Commission’s recent rule proposal,[7] and we are eager to continue the conversation on how to best harness the power of new and developing technologies while effectively navigating their complexities.  

Today’s conversations will also bring a spotlight to the work that is performed by regulators on a daily basis and place each of our individual regulatory efforts into a broader context. By encouraging a dialog amongst regulators, as well as other stakeholders, including industry professionals and academics, these conversations will aid our navigation of difficult and complex regulatory initiatives.

While the investment management industry continues to grow and innovate, one thing remains constant—the importance of protecting the access to capital markets for investors. As we look ahead at the advancements in artificial intelligence, blockchain, and automation—and focus on facilitating innovation within the asset management industry—it is important to keep in mind the importance of the resilience and adaptability of the existing structural and regulatory protections contained in the Investment Company Act of 1940 and the Investment Advisers Act of 1940.  

Speaking on behalf of the entire Division of Investment Management, we look forward to your contributions to today’s discussion. We have assembled an impressive and experienced array of academics, fellow regulators, practitioners, commentators, and authors who will share their perspectives and expertise. I would like to thank them for their willingness to volunteer their time and share their insights. Their input will contribute to a substantive and productive consideration of the emerging trends expected to impact the asset management industry and—importantly—investors.

I want to thank, William Birdthistle, my predecessor, for establishing the inaugural IM emerging trends conference last year, which I was happy to support doing again this year.  I would also like to express my appreciation to the staff that made today’s event possible.  In particular, the conference could not have been made possible without the tireless work of Jennifer McHugh.

I would also like to thank all of you in the audience, participating either in person or virtually through the live webcast. We appreciate that you care about the work that we do on behalf of the nation’s investors and that you want to learn more about asset management issues and trends.  

I hope that today’s conference provokes thoughts, spurs discussion, and focuses our minds on consequential trends both large and small.  As regulators, it is critical that we have a strong sense of what is coming so that we can prepare and position ourselves as regulators to effectively protect the interests of the investing public.