ICI Makes Recommendations to Chamber of Commerce Commission on Capital Markets Regulation

Washington, DC, February 2007 - In a submission to a U.S. Chamber of Commerce commission, the Institute makes a series of recommendations concerning the regulatory structure of securities markets, as well as retirement and savings and tax issues.

Background
In 2006, the U.S. Chamber of Commerce organized an independent commission to consider the legal and regulatory framework for the U.S. capital markets in the 21st century and as a means to help preserve and strengthen the U.S. capital markets as a system that is "fully transparent and scrupulously honest, and yet a wellspring of innovation, invention, and growth." Through a series of 2006 and 2007 meetings and public hearings, the Commission seeks to develop a consensus reform agenda to ensure the continued competitiveness of capital markets and the availability of capital for business expansion and job creation.

ICI Position
In its submission, the Institute makes recommendations related to two main areas impacting the future strength of the U.S. capital markets - the regulatory structure of our securities markets and retirement and savings issues.

To ensure a more efficient and effective regulatory structure, the Institute notes that regulatory costs should be proportionate to their benefits and that regulatory disparities between similar financial products should be eliminated. Among areas of concern for the Institute are New York Stock Exchange broker voting, Sarbanes-Oxley Act reform, an independent chair requirement, point-of-sale disclosure, soft dollars, and proxy voting, the consolidation of New Stock Exchange and National Association of Securities Dealers, Inc. member regulation operations, and reform of the mutual fund disclosure system.

Because retirement and savings issues also are critical to maintaining the prosperity and strength of our nation's economy, ICI called for the support of policies that encourage competition, eliminate unnecessary complexity, cost and regulatory burdens, and maintain and strengthen tax and regulatory policies that encourage saving.

In an addendum to its original submission, the Institute underscored its support for enhanced tax efficiencies in the mutual fund market. ICI explained in its January 26 submission that important tax efficiencies will result from passage of the GROWTH Act, which defers taxes for mutual fund shareholders on reinvested capital gains distributions. ICI reiterates is support for the GROWTH Act, noting that the legislation would allow Americans, particularly those with more modest incomes and no access to an employer-sponsored retirement plan, to save more for retirement. The bill also would make U.S. funds more competitive with foreign funds for foreign shareholders.

Related Links

A second commission formed in 2006 is also addressing the competitiveness of U.S. securities markets. Sections of this website address issues related to U.S. securities markets, global markets and financial services, retirement security of U.S. workers.