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News March 14, 2011 Issue

IM Director Eileen Rominger’s Public Debut

Sheíd been on the job a whopping 17 days, and new Division of Investment Management director Eileen Rominger made her first appearance before industry professionals at the Investment Adviser Associationís annual Compliance Conference on Friday.

She is the first non-attorney director of IM, and she brings over 30 years of industry experience to the table. She noted in her opening remarks that she feels grateful to work at the SEC with "so many experienced and long-tenured" attorneys. Itís really been a pleasure to get to know the staff in the IM division, she said.

Only the day before, Rominger testified before Congress regarding the SECís requested 2012 budget. SEC leaders were in the hot seat, she said, and it was a very interesting experience and quite an honor to give her testimony. "I think the one thing that came through is that the mission across all the divisions of the SEC is a very consistent one, and weíre going to work together to get it right."

Thanking the IAA for the invitation, she noted it was the first time she was speaking to industry professionals in the role of regulator, and not as someone working in asset management. "I am really excited to have the opportunity to use my experience to benefit investors, particularly small investors, who rely on our industry to help them pay for college, to pay for their retirement, to pay for all of lifeís important events.

Iím really thrilled that in my debut speech I get to be here with you, compliance professionals." The work of compliance professionals is incredibly important, she noted. Being a portfolio manager in the industry for 30 years, she acknowledged the "incredible value" of the compliance function.

Rominger also acknowledged some of the difficulties compliance professionals face. Management is not always as sensitive as it should be to compliance concerns, she said. There are business decisions to be made and there are profitability pressures, but now more than ever, it is really important to have good compliance.

Good compliance really manifests itself in a good corporate culture of ethics, she observed. It is not something that is an overlay or once-a-year training, it is who we are and what we do. The work compliance professionals do in building a culture of ethics in a firm is truly invaluable. And it is critical to the success of the industry, because it goes to investor trust.

"Compliance is the heart and soul of any regulatory program," said Rominger. Without good compliance, what good are regulations? Rominger noted she will rely on the help of compliance professionals in the private sector, and feels a partnership with them that will be critical in her new, current role. "We have the same goal, which is to further the fundamental fiduciary obligations on which the adviser-client relationship is based," she said. That also involves encouraging investor confidence in the asset management industry and in the capital markets.

One of her goals will be to recommend regulations that are both effective and workable, she said. The SEC is working hard to achieve that while still intending the necessary investor protection focus of those regulations. Compliance professionals in the asset management industry can help the staff do that. She urged her audience to participate in the rulemaking process. "We really want to hear from you on rule recommendations." The comments the staff receives are incredibly important, and they are taken very, very seriously. "I know itís time-consuming and a lot of work," she said in closing, "but thank you, because they are very important."