EY s ninth annual Mutual Fund Seminar

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1 EY s ninth annual Mutual Fund Seminar Advancing insight 15 June 2017 ey.com/mutualfundseminar Program and presentation

2 Welcome to EY s Mutual Fund Seminar Advancing insight We are delighted to welcome you to Ernst & Young LLP s (EY) ninth annual Mutual Fund Seminar in Chicago. This year s event was video streamed, live from New York, to eight participating cities across the US Baltimore, Cincinnati, Dallas, Minneapolis, Philadelphia, Pittsburgh, San Antonio and Tysons in May. The seminar will also take place in Boston later this month. We are delighted to bring this seminar to you as part of our ongoing commitment to the industry and hope you find the discussions informative and insightful. EY is dedicated to the mutual fund industry. Our Global Wealth & Asset Management practice is committed to offering industry insight and coordinating a network of more than 16,000 Wealth & Asset Management professionals who are ready to develop practical approaches to the assurance, advisory, tax and transactions issues you face. The current economic and regulatory environment is providing opportunities for the US mutual fund industry, promoting changes in product offerings and a rethinking of business strategy. Today s challenges are expected to lead many fund complexes toward more cost-effective and more efficient operations. For this year s keynote address, we are honored to have Norm Champ, author and former Director of the Division of Investment Management at the U.S. Securities and Exchange Commission (SEC). Norm joined Kirkland & Ellis LLP Investment Funds Group as a partner in February We also have a team of distinguished panelists who will draw on their experiences to shed light on key developments in the industry. We will investigate how mutual funds are adapting to the evolving investor, regulatory and competitive landscape and share our thinking on what this means for the industry s future. We hope you will find the discussion useful in dealing with the major challenges that mutual fund complexes face. The objective of today s event is to address burning issues from a macro perspective. Should you wish to discuss any of these issues in greater depth, please feel free to contact any of our panelists or your EY advisor. A warm welcome to each of you we hope you enjoy the ninth annual Chicago Mutual Fund Seminar. Tom Flannery John Kavanaugh Partner and Co-Leader, Americas Wealth & Asset Management, Financial Services Organization Ernst & Young LLP Partner and Leader, Central Wealth & Asset Management Assurance, Financial Services Organization Ernst & Young LLP 1 EY s Mutual Fund Seminar Chicago

3 Advancing insight Why EY? EY provides services to: all of the top10 US mutual fund companies and... EY s Wealth & Asset Management practice is a market leader, providing services to 96% of the top 25 global asset managers 88% of the top 50 US mutual fund companies More than 1,000 executives attend EY s Mutual Fund Seminar series across key US markets EY s Mutual Fund Seminar Chicago 2

4 Agenda The Mutual Fund Seminar will also take place on: 20 June 2017 Boston Welcome to EY s ninth annual Mutual Fund Seminar in Chicago. 8:30 a.m. 8:40 a.m. Welcoming remarks John Kavanaugh, Partner and Central Wealth & Asset Management Assurance Leader, Financial Services Organization, Ernst & Young LLP 8:40 a.m. 9:15 a.m. Keynote address Norm Champ, Partner at Kirkland & Ellis LLP, author and former Director of the Division of Investment Management at the SEC 9:15 a.m. 9:50 a.m. Regulatory and financial reporting update Moderator: Panelists: Brenda Fleissner, Partner, Financial Services Organization, Ernst & Young LLP Jaime Eichen, Partner, Financial Services Organization, Ernst & Young LLP Jim Rooney, Chief Financial Office and Treasurer, Ariel Investment Trust 9:50 a.m. 10:25 a.m. Tax update: tax reform and related RIC developments Moderator: Panelists: Ryan Ross, Partner, Financial Services Organization, Ernst & Young LLP Margie Arnst, Executive Director, Financial Services Organization, Ernst & Young LLP Tara Bradshaw, Senior Manager, Washington Council Ernst & Young Melissa Mathias, Senior Manager, Financial Services Organization, Ernst & Young LLP 10:25 a.m. 11:10 a.m. Current industry trends Moderator: Panelists: Keith Caplan, Principal and Central Wealth & Asset Management Advisory Leader, Financial Services Organization, Ernst & Young LLP Joe Deitzer, Principal, Financial Services Organization, Ernst & Young LLP Amit Nanavati, Senior Manager, Financial Services Organization, Ernst & Young LLP Jonathan Roberts, Senior Manager, Financial Services Organization, Ernst & Young LLP 11:10 a.m. 11:15 a.m. Closing remarks John Kavanaugh, Partner and Central Wealth & Asset Management Assurance Leader, Financial Services Organization, Ernst & Young LLP 3 EY s Mutual Fund Seminar Chicago

5 Mutual Fund Seminar speakers Chicago Keynote speaker Norm Champ Partner at Kirkland & Ellis LLP, author and former Director of the Division of Investment Management at the SEC Norm joined Kirkland & Ellis LLP Investment Funds Group as a partner in February He is the former Director of the Division of Investment Management at the SEC. Under his leadership, the SEC adopted a new rule in July 2014 to reform money market mutual funds. Norm s book, titled Going Public: My Adventures Inside the SEC and How to Prevent the Next Devastating Crisis, chronicles his experiences at the agency and how they shed light on the regulatory process and government policy-making. Norm is also a lecturer on investment management at Harvard Law School. He began teaching in the fall of 2015, having just completed a term as Visiting Scholar. He is researching and writing on the regulatory response to the financial crisis. While at the SEC, Norm led the creation of the Division s Risk and Examination Office, which monitors the investment management industry to understand risks that regulations should address. He was the leader of the SEC s interactions with the Financial Stability Oversight Council as the Council turned its attention to designating asset management firms as systemically important. He also worked on crisis management efforts at securities firms to protect customers of those firms. In addition, Norm headed the creation of Guidance Updates and Senior Level Engagement, initiatives created to provide transparency to the industry and to engage with boards and senior management of asset management firms, respectively. Norm also recommended that the SEC adopt the portion of the Volcker Rule covering private funds and other matters. For his service in the Division at the SEC, he received the Chairman s Award for Law and Policy in 2014, the Chairman s Award for Labor Management Relations in 2014 and the Chairman s Analytical Methods Award in Norm is on the Board of Directors of the School of American Ballet and a member of the Board of Trustees of The Spence School. Norm has an AB, summa cum laude, in History from Princeton University; an MA in War Studies from King s College London, where he was a Fulbright Scholar; and a JD, cum laude, from Harvard Law School. EY s Mutual Fund Seminar Chicago 4

6 Our discussion leaders Chicago EY Margie Arnst Executive Director, Financial Services Organization Ernst & Young LLP Margie has more than 21 years of public accounting experience working primarily in the Financial Services Organization s Asset Management Tax practice at Ernst & Young LLP. Her experience includes providing tax advisory and compliance services to mutual funds and hedge funds. She currently facilitates monthly technical meetings for EY s National Regulated Investment Companies (RIC) Tax practice to discuss industry trends and current tax developments and acts as the knowledge champion by distributing timely and relevant tax topics to the practice. She has served as a reviewer in EY s Tax Quality Review program and has organized and taught asset management courses within EY. Margie is a Certified Public Accountant (CPA) and holds a BS in Accounting from Montana State University. EY Tara Bradshaw Senior Manager Washington Council Ernst & Young tara.bradshaw@ey.com Tara is a member of EY s Washington Council Ernst & Young (Washington Council) practice where she provides clients with legislative and government affairs strategies related to a broad range of policy areas, including financial services, corporate taxation and health tax issues. In addition, she provides clients with integrated advocacy, communications, media relations and public affairs strategies to help them meet their legislative and regulatory goals. With a background in tax policy communications she knows how to distill complex policy issues into simple, understandable ideas and creates winning messages to help clients tell their policy story to Capitaol Hill, key stakeholders and the media. Her communications work with Washington Council clients has been recognized by the Public Relations Society of America National Capital Chapter. In addition to helping clients minimize their press exposure, she has also positioned clients to be featured in top-tier national publications. Prior to joining Washington Council, Tara served as the Communications Director for the President s Advisory Panel on Federal Tax Reform (the Panel), where she developed and implemented the communications strategy for the Panel; advised the executive director and Panel chairmen on the communications and messaging of key policy issues; and served as the spokeswoman on Panel policies and initiatives. Prior to joining the Panel, she served as an associate director in the Americas Public Relations Group at EY, where she managed public relations for the National Tax department. She holds an MA in Mass Communication and Journalism and a BA in English from the University of South Carolina. 5 EY s Mutual Fund Seminar Chicago

7 Our discussion leaders Chicago EY Keith Caplan Principal and Central Wealth & Asset Management Advisory Leader, Financial Services Organization Ernst & Young LLP Keith is a New York-based principal in Ernst & Young LLP s Financial Services Organization (FSO) and has served the financial services industry for more than 25 years. He leads the firm s North American Advisory Asset Servicing business, is the Global Advisory Leader on the Northern Trust account and is the FSO Central Wealth & Asset Manager Advisory Leader. Keith has wide-ranging experiences across merger integration, business and technology strategy, process improvement, robotics, regulatory and compliance, systems development life cycle management, alternative and traditional asset management client onboarding and advising on the operating models for front-, middle- and back-office investment operations. Keith earned a BS in Business Administration from the State University of Albany with a concentration in Management Information Systems and a second major in English. EY Joe Deitzer Principal, Financial Services Organization Ernst & Young LLP joseph.deitzer@ey.com Joe is principal in the Advisory Services practice of Ernst & Young LLP. He has over 18 years of experience as a management consultant and software executive within the Wealth & Asset Management sector. Joe s areas of experience include investment management operations, technology platform selections and implementations, and regulatory compliance program development. He spent over 11 years solely focused on portfolio management, trading and fund accounting technology initiatives. Joe has been involved in more than 35 fund accounting and trading system implementations or upgrades within asset management firms and has advised approximately 25 asset management clients on regulatory compliance programs. Joe has a BS in Business Administration from Robert Morris University and is a regular panelist on regulatory implications for asset managers, product strategies and technology trends across the industry for Financial Research Associates, SunGard, Advent Software, the Securities Industry and Financial Markets Association (Asset Managers Forum) and the Regulatory Compliance Association. EY Jaime Eichen Partner, Financial Services Organization Ernst & Young LLP jaime.eichen@ey.com Jaime is a partner in Ernst & Young LLP s Financial Services Organization. She has more than 18 years of experience in the asset management industry, including serving asset management clients such as mutual funds, SEC-registered and non-registered hedge funds, private equity funds, business development companies, investment advisors and general partners. Prior to rejoining Ernst & Young LLP in 2014, Jaime was the Chief Accountant for the SEC s Division of Investment Management for three and a half years where her responsibilities included directing the financial reporting, accounting and auditing practices of investment companies in compliance with the federal securities laws and discussing significant investment company accounting and auditing standard setting matters with the Financial Accounting Standards Board and the Public Company Accounting Oversight Board. While at the SEC for nearly seven years, Jaime also worked closely with other divisions and offices within the SEC, including the Division of Enforcement, the Office of Compliance Inspections and Examinations, and the SEC s Office of the Chief Accountant. EY s Mutual Fund Seminar Chicago 6

8 Our discussion leaders Chicago EY Brenda Fleissner Partner, Financial Services Organization Ernst & Young LLP Brenda is a partner in Ernst & Young LLP s Assurance practice. She has more than 26 years of public accounting experience serving public and private companies, including registered and non-registered funds, banks, broker-dealers, investment advisors and distribution companies. Brenda has extensive experience with SECregistered public companies and private companies with private equity backing. In addition, she has investment and financial markets experience, including derivative securities such as forwards, options, swaps and futures. EY John Kavanaugh Partner and Central Wealth & Asset Management Assurance Leader, Financial Services Organization Ernst & Young LLP john.kavanaugh@ey.com John is a partner at Ernst & Young LLP and the Central Market Segment Wealth & Asset Management Assurance Leader for the Financial Services Organization. Prior to joining the Chicago office in September 2000, John spent three years in EY s London Investment Management Group, and before that, he was with EY s Boston Financial Services Industry practice. John has over 32 years of experience providing audit, accounting and business advisory services to a variety of financial services clients. His clients have included banks, broker-dealers, advisors, mutual funds, hedge funds and private equity funds. John is a CPA and a graduate of Boston College. He is also a former member of the American Institute of Certified Public Accountants Investment Company Liaison Task Force, which is a group of industry and accounting professionals who meet monthly in Washington, DC, to discuss emerging accounting and other issues. John served on the Steering Committee of the Greater Chicago Investment Management Group and currently serves on the Board of Directors of Chicago Scholars. EY Melissa Mathias Senior Manager, Financial Services Organization Ernst & Young LLP melissa.mathias@ey.com Melissa is a senior manager in the International Tax Services practice of the Financial Services Office of Ernst & Young LLP. She has been in public accounting for over nine years and began her career in New York City where she worked with many of the industry s leading asset managers on a variety of complex international tax planning and consulting matters. Melissa is based in Chicago and provides tax advisory services to a variety of multinational financial services clients, including insurance companies, hedge funds, private equity funds and proprietary trading funds. Melissa has extensive experience in assisting clients with challenging international tax matters and in working with clients to identify new planning opportunities and solutions. She has developed knowledge of complex cross-border investment structuring, acquisition planning, international tax due diligence, buy- and sell-side planning and deal structuring, and entity reorganization planning. She also has extensive experience in fund structuring, global tax planning for management company operations, controlled foreign company and passive foreign investment company planning and reporting, Foreign Investment in Real Property Tax Act considerations, effectively connected income and fixed, determinable, annual or periodic income planning, and foreign tax matters related to Accounting Standards Codification 740, Income Taxes. Melissa is a frequent speaker on these issues at industry conferences and roundtables. Melissa earned her LLM in Tax at Northwestern University School of Law and her JD and MBA from Duquesne University, where she also earned her BA degree. She is a member of the Pennsylvania Bar Association. 7 EY s Mutual Fund Seminar Chicago

9 Our discussion leaders Chicago EY Amit Nanavati Senior Manager, Financial Services Organization Ernst & Young LLP Amit is a senior manager in the Financial Services Organization, Wealth & Asset Management practice of Ernst & Young LLP. Amit has over 20 years of experience across financial services and technology. In his current role, Amit has led the migration of trust, advisory and mass wealth business units of a large bank into an registered investment advisor structure. He has also managed regulatory impacts, as well as assessed current state and developed target state operating and technology models. Amit has experience managing current state and future state compliance and workflow assessment and implementation, reviewing and optimizing compliance rules and resolving data issues. He has developed data frameworks for asset managers to improve data quality, rationalized data sources for consumption and implemented architecture for data aggregation and reporting across multi-asset portfolios. Prior to EY, Amit spent eight years with Charles River Development as a vice president responsible for all clientfacing activities. EY Jonathan Roberts Senior Manager, Financial Services Organization Ernst & Young LLP jonathan.roberts1@ey.com Jonathan is a senior manager with Ernst & Young LLP s Transaction Advisory Services (TAS) practice with over 14 years of experience providing advisory and audit services in the financial services sector. He has advised on a range of acquisitions and divestitures across the financial services sector, including wealth and asset management, FinTech, broker-dealer and insurance transactions. Jonathan is primarily focused on pre-acquisition due diligence on both buy-side and sell-side engagements. He has led full entity and carve-out transactions for global financial institutions focused on financial and accounting due diligence. Prior to joining the US team, Jonathan worked for four years in EY s UK Financial Services practice providing audit services to UK financial services clients. He is a qualified Chartered Accountant with the Institute of Chartered Accountants of Scotland (ICAS) and holds a Master s degree in Management and a Bachelor s degree in Business Economics from the University of Durham, UK. Jim Rooney Chief Financial Officer and Treasurer Ariel Investment Trust Jim joined Ariel Investment Trust (Ariel) in 2015 and is responsible for overseeing all aspects of fund administration, including fund accounting, auditing and custody. In his capacity as Chief Financial Officer and Treasurer for the funds, he works closely with the independent board of trustees to provide the fund complex data needed to fulfill their fiduciary responsibilities. Prior to Ariel, Jim spent eight years with Fidelity, first as Assistant Treasurer of the funds, and more recently as Vice President of Fidelity Pricing and Cash Management Services, where he led the fund reporting group. With over 29 years in the financial services industry, he has also held leadership positions at Wellington Management Company, State Street and Chase Global Funds Services Company. Jim earned his BA in American Civilization from Williams College and a Master s degree in Accounting from Northeastern University in Boston. He is also a CPA. EY s Mutual Fund Seminar Chicago 8

10 Our discussion leaders Chicago EY Ryan Ross Partner, Financial Services Organization Ernst & Young LLP Ryan is a partner in Ernst & Young LLP s Financial Services Organization Tax practice and has more than 17 years of experience serving public and non-public clients in the asset management industry. He has spent the last 13 years in EY s FSO focusing both domestically and internationally on mutual fund, hedge fund, fund of hedge funds and private equity clients. Ryan also leads campus recruiting for the Chicago FSO Tax practice, as well as numerous training and education sessions. Ryan has experience with various corporate, partnership and fund of funds structures. He has extensive experience with the taxation of securities, including complex fixedincome instruments, swaps, foreign securities and other derivatives. Ryan earned a Bachelor s degree in Accounting from Drexel University and is a CPA in Pennsylvania and Illinois. 9 EY s Mutual Fund Seminar Chicago

11 Panel discussions Panel 1 Regulatory and financial reporting update Panel 2 Tax update: tax reform and related RIC developments Panel 3 Current industry trends EY s Mutual Fund Seminar Chicago 10

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52 EY Assurance Tax Transactions Advisory About EY EY is a global leader in assurance, tax, transaction and advisory services. The insights and quality services we deliver help build trust and confidence in the capital markets and in economies the world over. We develop outstanding leaders who team to deliver on our promises to all of our stakeholders. In so doing, we play a critical role in building a better working world for our people, for our clients and for our communities. EY refers to the global organization, and may refer to one or more, of the member firms of Ernst & Young Global Limited, each of which is a separate legal entity. Ernst & Young Global Limited, a UK company limited by guarantee, does not provide services to clients. For more information about our organization, please visit ey.com. Ernst & Young LLP is a client-serving member firm of Ernst & Young Global Limited operating in the US. EY is a leader in serving the global financial services marketplace Nearly 51,000 EY financial services professionals around the world provide integrated assurance, tax, transaction and advisory services to our asset management, banking, capital markets and insurance clients. In the Americas, EY is the only public accounting organization with a separate business unit dedicated to the financial services marketplace. Created in 2000, the Americas Financial Services Organization today includes more than 11,000 professionals at member firms in over 50 locations throughout the US, the Caribbean and Latin America. EY professionals in our financial services practices worldwide align with key global industry groups, including EY s Global Wealth & Asset Management Center, Global Banking & Capital Markets Center, Global Insurance Center and Global Private Equity Center, which act as hubs for sharing industryfocused knowledge on current and emerging trends and regulations in order to help our clients address key issues. Our practitioners span many disciplines and provide a well-rounded understanding of business issues and challenges, as well as integrated services to our clients. With a global presence and industry-focused advice, EY s financial services professionals provide high-quality assurance, tax, transaction and advisory services, including operations, process improvement, risk and technology, to financial services companies worldwide Ernst & Young LLP. All Rights Reserved BDFSO ED None This material has been prepared for general informational purposes only and is not intended to be relied upon as accounting, tax, or other professional advice. Please refer to your advisors for specific advice. ey.com