Grim named SEC investment management chief

The US Securities and Exchange Commission (SEC) has named David Grim the director of the Division of Investment Management. Grim has been serving as the division’s acting director since February, following the departure of Norm Champ, who left to become a visiting scholar at Harvard Law School.

Prior to his appointment to acting director, Grim had served as the division’s deputy director since January 2013, where he was responsible for overseeing all aspects of its disclosure review, rulemaking, guidance and risk monitoring functions. He has been working in the division for nearly 20 years, after joining in 1995 as a staff attorney. 

The Division of Investment Management is responsible for key rulemaking over the multi-trillion dollar asset management industry. One issue important to private equity firms has been the question of broker-dealer registration.

During a 2013 speech, an SEC official raised the possibility that private equity firms were in violation of broker-dealer registration requirements if their marketing staff received bonuses for selling fund commitments or when charging certain transaction fees during an acquisition.

A recent SEC no-action letter clarified that private business brokers do not necessarily need to be licensed to pitch deals, but specific guidance on private equity broker-dealer registration is still expected. The private equity industry is hoping Grim’s division will deliver the guidance before year-end.

The SEC has cited broker-dealer registration as a problem in deficiency letters, sources tell pfm, but the commission has yet to bring any enforcement action on the matter. Congress is debating a bill that would largely exempt private equity firms from that threat.