Compliance October 27, 2016

NTSA Supports Extending Fiduciary Rule to Governmental 403(b)s

As part of its support, NTSA developed a fiduciary education program that will be available to its members later this year.
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The National Tax-deferred Savings Association (NTSA) has formally affirmed its support for a fiduciary standard for all not-for-profit organizations, and the extension of the Labor Department’s fiduciary rule to governmental 403(b) plans and participants.

NTSA, an independent, non-profit association dedicated to the 403(b) and 457(b) marketplace, chose to embrace the standard, even though the Labor Department’s fiduciary rule does not apply to governmental retirement plans.

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“This policy is in keeping with NTSA’s long-standing support for effective and clear disclosure of fees, compensation and alternatives within 403(b) plans,” says NTSA Executive Director Chris DeGrassi.

As part of its support for this new standard, NTSA, in conjunction with its parent organization, the American Retirement Association, began development of a fiduciary education program in advance of the final Labor Department rule, and will make the program available to its members later this year, ahead of the April 10, 2017, implementation date of the fiduciary regulation for private-sector plans, such as 401(k)s and IRAs.

“NTSA and NTSA partners have led on these issues for many years, and will continue to work to advance professional standards in the best interests of public education employees that need these important services our members provide,” DeGrassi says. “America’s teachers need and deserve access to the best, and most transparent financial advice as they work to prepare for their future, and NTSA’s members have long been an integral part of that planning.”
Products October 27, 2016

Investment Products and Services

SSGA launches new ESG strategies, and Millennium Trust expands Fund Custody Solution.
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SSGA Launches New ESG Strategies 

State Street Global Advisors (SSGA), the asset management business of State Street Corporation, announced that the SPDR MSCI EAFE Fossil Fuel Reserves Free ETF (EFAX) and the SPDR MSCI Emerging Markets Fossil Fuel Reserves Free ETF (EEMX) began trading on the NYSE Arca.

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Developed to address growing client demand for environmental, social and governance (ESG) strategies and help investors divest from companies owning fossil fuel reserves while maintaining the benefits of core exposures to key benchmarks, the newest additions to SSGA’s ESG line-up are the first MSCI EAFE and Emerging Markets ex Fossil Fuel Reserves Free ETFs, the firm contends.

The SPDR MSCI EAFE Fossil Fuel Reserves Free ETF (EFAX) seeks to track the MSCI EAFE ex Fossil Fuels Index. The Index is designed to measure the performance of companies in the MSCI EAFE Index that do not own fossil fuel reserves. Fossil fuel reserves are defined as economically and technically recoverable sources of crude oil, natural gas and thermal coal but do not include metallurgical or coking coal, which are used in connection with steel production.

The SPDR MSCI Emerging Markets Fossil Fuel Reserves Free ETF (EEMX) seeks to track the MSCI Emerging Markets ex Fossil Fuels Index. The Index is designed to measure the performance of companies in the MSCI Emerging Markets Index that do not own fossil fuel reserves, as defined above.  The MSCI Emerging Markets Index captures large and mid-capitalization representation across 23 emerging market countries.

The gross expense ratio for EFAX is 0.30% and the net expense ratio is 0.20%. The gross and net expense ratio for EEMX is 0.30%.

“With governments across the world committed to addressing climate change, investors have been increasingly looking to minimize the potential negative impact that exposure to companies owning fossil fuel reserves could have on their portfolios as traditional market-cap based passive strategies that do not screen out certain industries or business practices may not account for this risk,” says Christopher McKnett, managing director and head of ESG at State Street Global Advisors. “SSGA has managed ESG portfolios for 30 years and with client demand for these strategies higher than it’s ever been, this suite of SPDR funds is designed to provide investors with passively managed tools to divest from companies owning fossil fuel reserves while maintaining exposure to core US, international and emerging markets benchmarks.” 

NEXT: Millennium Trust Expands Fund Custody Solution

Millennium Trust Expands Fund Custody Solution 

Millennium Trust Company, a provider of custody solutions for institutions, advisers, and individuals, has expanded the offering of its Fund Custody Solution to include custody for registered investment companies ('40 Act Funds) as well as verification services.

"Millennium's Fund Custody solution was created in late 2010 to address advisers' need to comply with the SEC Custody Rule 206(4)-2, and to create much-needed transparency for the end investor," says Gary Anetsberger, CEO of Millennium Trust. "The services quickly attracted adviser-controlled funds investing in alternative assets such as marketplace loans, private equity, hedge funds as well as traditional assets.”

Millennium's Fund Custody expanded its services to support funds leveraging their loan portfolios by providing verification and certification services required by the funds' credit facilities. "This new service offers the ease of having custody and verification services with one service provider," notes Meg Zwick, Millennium Trust's director of Alternative Custody Services. In addition, Millennium expanded its services to include providing custody for '40 Act Funds. Assets under custody within the fund custody division surpassed $10.8 billion as of September 30.

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