What is the Division of Investment Management

The Division of Investment Management is a branch of the U.S. Securities and Exchange Commission (SEC) overseeing investment funds, professional fund managers, securities research analysts and investment advisers.

Breaking Down Division of Investment Management

The Division Investment Management acts under the authority of federal securities laws such as the Investment Company Act of 1940 and the Investment Advisers Act of 1940. A main concern of the division is protecting retail investors from fraud and abuse from the investment industry. As such, the division oversees the registration, disclosures and advertising of mutual funds, exchange traded funds, variable insurance products and investment advisers. A secondary concern is assisting industry professionals as they attempt to comply with sometimes complex and onerous regulations.

The Division of Investment Management regulated public-utility holding companies under the authority of the until the law was repealed by the passage of the Energy Policy Act of 2005, after which transferred more utility regulation to the Federal Energy Regulatory Commission (FERC).

Offices of the Division of Investment Management

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

The Chief Counsel’s Office (CCO) primarily interprets federal securities laws relevant to the investment management industry. It issues interpretive letters and reviews exemption requests from investment companies. The CCO also gives individualized interpretive advice to investment professionals seeking to operate within the bounds of federal law. Complaints about potential violations to federal securities laws or division policies pass through the CCO.

The Disclosure Review and Accounting Office (DRAO) reviews investment and variable insurance filings such as registration statements, financial statements and proxy statements. The DRAO’s more directly works with investment companies and advisers to comply with disclosure and accounting policies of federal securities laws. In 2018, the DRAO published a new website that keeps all disclosure references and necessary forms in one place to simplify the process for both investment companies and retail investors. Pages within the site include Fund Disclosure at a Glance, Accounting and Disclosure Information (ADI) and Disclosure Reference Material.

The Rulemaking Office considers new and amended rules and forms related to federal securities laws and on behalf of the SEC. The office is in charge of preparing Congressional testimony and facilitating Congressional inquiries as the need arises.

The Analytics Office monitors shifts in the investment management industry, providing the Division of Investment with current, accurate data on which to base its actions. The Analytics Office makes its risk analyses and forecasts publicly available.