Some of the top minds in the mutual fund industry gathered in Washington, D.C. in late May for the 2023 ICI Leadership Summit. The second year of the conference did not disappoint. The dynamic lineup of speakers delivered versatile and thought-provoking ideas for how the industry can navigate current and future challenges and opportunities.

The ICI team and the conference committee did a great job assembling a fantastic and engaging agenda.

The first fireside chat of the 2023 Leadership Summit took off with Tim Buckley, CEO and Chairman of Vanguard, and Tom Faust, Chairman of Morgan Stanley Investment Management. The pair discussed evolving leadership trends in a time of uncertainty, the power of technology driving the future of the industry, and the need to keep strengthening our focus on investors.

The first day also featured an inspiring luncheon with keynote speaker Penny Pennington, Managing Partner at Edward Jones, and Doug Sieg, Managing Partner and CEO of Lord, Abbett & Co. Pennington discussed leadership, effective decision-making, and learning, and how that translates to a sense of belonging. stressed that her job is to set the ambition of the organization, then set the conditions for that ambition to be met.

In a small group session, Northern Trust Senior Vice President Lisa Shea and Stuart Bateman, Senior Vice President at Franklin Templeton, facilitated a very valuable session on change management within a dynamic work environment.

Citi CEO Jane Fraser shared her insights in a fireside chat with ICI President and CEO Eric Pan about the current events and challenges facing the industry. Fraser offered advice she has learned from her own experiences leading a global company in today’s ever-changing climate.

“The asset management space is changing. Big firms are getting bigger, private markets are growing, and we’re seeing a democratization of investments as non-institutional investors look to diversify their assets,” Fraser said. “This is amidst a macro backdrop with many real and pressing concerns. However, the financial system and broader economy are resilient, and there’s opportunity ahead as companies and industries continue to transform.”

The second day kicked off with a great breakfast conversation on SEC priorities and rulemaking with former SEC senior staff members at Kirkland Ellis. Dianne Blizzard, partner at Kirkland and Ellis, noted how the SEC’s process of rule proposing seems to be extremely insular, with no real input from anyone outside the commission. As was the case with the swing pricing proposal, the SEC has established a pattern of proposing very complex and impactful changes to the mutual fund industry without much, if any, outside input.

Blizzard suggested that the SEC start publishing an “advance notice of proposed rule-making” before they go to the effort of developing a proposed rule, and allow industry input before and during the rule-making process rather than after the fact. This should result in a better work product coming out of the SEC, a shorter time frame to get to final regulations, and rules that incorporate the SEC’s desired intent, but tempered with real world input on the practical application of the rules.

In a session on the regulatory landscape, US Securities and Exchange Commission Chair Gary Gensler and ICI President and CEO Eric Pan discussed recent SEC proposals and priorities, including the swing pricing, hard close, and liquidity risk management proposal, open-end and money market fund regulation, and more.

Appearing virtually, SEC Chair Gensler spoke at length about financial stability and his agenda regarding open-end funds. However, the Chair’s comments did raise a few questions that the mutual industry will need answers for.

Deputy Secretary Wally Adeyemo sat for a fireside chat with ICI President and CEO Pan to discuss the US Department of the Treasury’s top priority policies. The Deputy Secretary stressed the critical importance of the funds ICI members manage to all Americans.

“We’re aligned in terms of having a regulatory regime that provides clear rules of the road. It creates real opportunities for your industry but also for the American people to feel confident about investing in these financial markets,” said Deputy Secretary Adeyemo.

The ICI Leadership Summit remains an important forum, providing members with an opportunity to develop and share views on industry issues while equipping leaders with the tools to navigate through uncertainty and ambiguity across the asset management landscape.

It was clear across the two days of debate and discussion that we have reached a tipping point for true transformation across the industry. We are all committed to facilitating safe and efficient asset growth for all investors and aiding firms as they adapt to this changing environment.