Mutual Funds Have Implemented Institute's Recommendations on Personal Investing
Washington, DC, April 21, 1995 - A survey of mutual funds, closed-end funds, and other investment companies by the Investment Company Institute shows that an overwhelming majority of fund groups have voluntarily implemented Institute recommendations to adopt measures—beyond those required by law—to address potential conflicts of interest arising from personal investment by fund managers and other investment company personnel.
The results of the survey were presented today to the Securities and Exchange Commission. The Institute's recommendations were unveiled last May in the report of the Institute's blue-ribbon Advisory Group on Personal Investing.
"The Institute's review of the standards applicable to personal investing by investment company personnel and the recommendations developed by the Advisory Group were designed to guide the Institute's members as they consider what additional measures may be appropriate in this area," said Jon S. Fossel, Chairman of the Institute and Chairman of Oppenheimer Management Corporation. "This report demonstrates that the vast majority of the Institute's members have embraced these recommendations. The Institute believes the process has been a constructive one for our members and has yielded beneficial results for the investing public," he said. Mr. Fossel was a member of the Advisory Group that originally issued the recommendations.
The survey also found that many funds extended, or went beyond, the Institute's recommendations.
About 85% of all investment company members, representing 97% of all assets held by Institute members, responded to the survey. The Institute recommended that investment companies adopt thirteen measures, in three broad areas:
"The results of this survey are tangible evidence of our industry's commitment to protect and enhance the interests of the investing public," said Matthew P. Fink, President of the Institute. "It is especially significant that funds' codes of ethics substantially exceed legal requirements as well as restrictions placed on key personnel of other pooled investment vehicles," he added.
The Advisory Group, composed of six senior industry executives, was created February 16, 1994, to review existing laws, practices, and standards governing personal investing activities of investment company personnel and to make recommendations considered necessary to ensure continued protection of the interests of fund investors. The Advisory Group issued its recommendations on May 9, 1994.
Last June 30, the Institute's Board of Governors unanimously approved the recommendations as the basis for industrywide standards of conduct.
The Investment Company Institute is the national association of the investment company industry. Its membership includes 5,528 open-end investment companies (mutual funds), 473 closed-end investment companies, and 12 sponsors of unit investment trusts. Its mutual fund members have assets of about $2.26 trillion, accounting for about 95% of total industry assets, and have over 38 million individual shareholders.