February 22, 2008

The Honorable Mike Crapo
Chairman
Senate Republican Capital Markets Task Force
239 Dirksen Senate Office Building
Washington, DC 20510

Re: Examination of the Competitiveness of the U.S. Financial Markets

Dear Senator Crapo:

The Investment Company Institute,¹ the national association of U.S. mutual funds and other investment companies, commends the Senate Republican Capital Markets Task Force for its welcome and timely examination of the competitiveness of the U.S. financial markets. Increasing global competition poses a serious challenge for our financial markets, and how we respond has significant long-term implications for the nation's economy as a whole. This challenge necessitates a concerted bipartisan response, and we look forward to working with leaders in the Senate and House for this purpose. We appreciate your leadership and hope that Congress will implement the reforms necessary to ensure our markets' continued success.

As detailed in our submission, our recommendations follow from several basic principles that we believe should be prominent among those that govern reforms of our capital markets: first, products and services offered and sold in a national market demand a coherent scheme of national regulation; second, if U.S. financial institutions are to succeed against global competitors, U.S. regulators must encourage and permit innovation; and third, our traditional regulatory organization and approach, especially for purposes of securities regulation, must be reformed in light of changed market realities. The attached submission elaborates on these principles with respect to the industry we know best -the fund industry - but we are convinced that they have broad applicability to the financial services industry as a whole. 

We thank you for the opportunity to share our views and look forward to working with the Task Force as it examines these critical issues. In the meantime, if you have any questions, please feel free to contact me directly at 202/326-5901, or Dean Sackett at 202/326-8319.

With warmest personal regards.

Sincerely,

Paul Schott Stevens
President & CEO

Attachment

cc: The Honorable Wayne Allard
The Honorable Judd Gregg
The Honorable Bob Bennett
The Honorable Orrin Hatch
The Honorable Kit Bond
The Honorable Kay Bailey Hutchison
The Honorable Jim Bunning
The Honorable Johnny Isakson
The Honorable Saxby Chambliss
The Honorable Jon Kyl
The Honorable Norm Coleman
The Honorable Mel Martinez
The Honorable Bob Corker
The Honorable Lisa Murkowski
The Honorable John Cornyn
The Honorable Pat Roberts
The Honorable Jim DeMint
The Honorable John Sununu
The Honorable Elizabeth Dole
The Honorable John Thune
The Honorable John Ensign
The Honorable David Vitter
The Honorable Mike Enzi

1 The Investment Company Institute is the national association of U.S. investment companies, including mutual funds, closed-end funds, exchange-traded funds (ETFs), and unit investment trusts (UITs). ICI seeks to encourage adherence to high ethical standards, promote public understanding, and otherwise advance the interests of funds, their shareholders, directors, and advisers. Members of ICI manage total assets of $12.68 trillion and serve almost 90 million shareholders.