ICI Quarterly Update, July 2026

Representatives Sam Liccardo (D-CA) Mike Lawler (R-NY) speak at an ICI event about the SAFER Act.

America at 250: a Nation of Investors 

As the country marked its 250^th anniversary in July, ICI made the case that the United States has become something the founders never envisioned: a nation of investors, where more than half of households hold a personal stake in American enterprise. That did not have to happen. For most of the country's history, investing was the province of a select few. That changed because of a series of deliberate choices: the Investment Company Act of 1940, which gave ordinary savers access to professionally managed funds; the arrival of the IRA and the 401(k) in the 1970s and 1980s, which turned workplaces into on-ramps for first-time investors; and the decades of steady saving that followed. And workplace plans have done more than introduce Americans to investing — they set them on a path to do more of it. Among households that bought their first mutual fund through a plan at work, roughly seven in 10 have since branched out into other accounts, from IRAs to taxable brokerage to education savings. 

Worth a Click

ICI's General Counsel, Paul Cellupica, in conversation with the SEC’s Director of the Division of Investment Management, Brian Daly.

• ICI to House Committee: Regulated Funds Ready to Power America's Next 250 Years
• A Supreme Court Win for Fund Investors — and the Work That Remains
• ETF leaders present before a crowd of over 1,000 at ICI’s ETF Conference
• Recognizing the Important Role of Fund Boards
• At ICI Summit, Hassett Details New Trump Executive Order Expanding Retirement Saving
• ICI Champions Saving for Children in Foster Care

• The Role of IRAs in US Households’ Saving for Retirement, 2025

   

Advocating for Investment Funds

ICI Backs DOL's Asset-Neutral Framework for 401(k) Investment Options

In June, ICI filed a comment letter supporting the Department of Labor's proposed rule establishing an asset-neutral, process-based safe harbor for selecting 401(k) plan investment options in accordance with President Trump's executive order on private markets access in defined contribution plans. The letter endorses the rule's central idea: what matters under ERISA is whether plan fiduciaries follow a sound decision-making process, not which asset class they consider. ICI also recommends targeted changes to strengthen the final rule—making clear that the safe harbor is one way to satisfy fiduciary duties rather than a new mandate, and ensuring the rule works as well for collective investment trusts and other vehicles as it does for mutual funds. ICI grounded its recommendations in a detailed economic analysis, which found that a properly scaled private market allocation can improve outcomes for retirement savers—in ICI's simulations, a target date fund with a 20% allocation to private market assets generated a median account balance 12% higher than a public-only baseline over a 40-year career.

Setting the Record Straight on ETF Tax Treatment

ICI President and CEO Eric J. Pan delivers remarks at ICI’s ETF Conference, highlighting the importance of preserving the tax treatment that has helped ETFs become a powerful investment tool for millions of Americans.

ICI continued making the case for preserving the tax treatment of ETFs, which reflects a basic fairness principle: investors should owe tax when they sell their own shares, not because other shareholders sold theirs. ICI President and CEO Eric J. Pan reinforced that message in his opening remarks at ICI’s ETF Conference, underscoring ICI’s commitment to protecting the current tax treatment and rejecting claims that Section 852(b)(6) is a loophole. The provision allows funds to meet redemptions in kind without triggering capital gains for shareholders who stay invested. Investors still pay taxes when they sell their shares, and the benefits reach well beyond the wealthy—73% of tax returns reporting capital gain distributions from regulated funds had adjusted gross income below $200,000.

SEC's Investor Advisory Committee Takes Up Fund Proxy Reform

Fund proxy reform took a significant step forward this quarter when the SEC's Investor Advisory Committee issued recommendations that closely track ICI's proposals for open-end funds, including pairing a lower participation quorum with a higher affirmative vote requirement. The recommendations follow ICI's sustained push on the issue, and the stakes are considerable: ICI research has found campaigns cost shareholders as much as $1.14 billion between 2020 and 2025. President and CEO Eric Pan welcomed the committee's action and urged the SEC to move on this pro-investor road map without delay.

ICI Weighs In on the Future of Public Company Reporting

In July, ICI filed a comment letter on the SEC's proposal to permit public companies to report semiannually rather than quarterly—a position built directly on member input, including group discussions and a survey of 14 member firms representing $6.1 trillion in US-registered fund assets. ICI strongly supports the SEC's goal of easing the burden on public companies and encouraging more of them to go public, but as investors in those companies, funds rely on regular financial reporting to make sound decisions for their shareholders. The letter recommends a middle path: keep the requirement that companies file financial statements and a management discussion every quarter—the two pieces members said they value most—while trimming other parts of the quarterly report to reduce the burden on public companies.

State Advocacy

ICI’s state government affairs team continues to strengthen relationships in key states while elevating ICI’s perspective on legislative issues:

• Florida: On June 26, Governor DeSantis signed SB 1452, ICI’s initiative to modernize Florida’s unclaimed property framework, marking a significant victory for investors and the asset management industry. The new law establishes a modern, objective standard for determining when a holder knows the location of an owner, rather than relying solely on investor inactivity. ICI continues to work closely with the Florida CFO’s Office and other stakeholders on implementation and regulatory guidance to ensure the law is implemented consistent with legislative intent.
   
• California: ICI continues to work alongside other industry stakeholders to oppose SB 1288, California's nonprobate transfer overhaul legislation, unless it is further amended. As currently drafted, the bill contains several problematic provisions, including requirements that property holders notify beneficiaries and restrictions on requiring beneficiaries to establish accounts before receiving assets. ICI, together with a coalition of industry trade associations, submitted a joint comment letter opposing many of the bill's proposed requirements and recommending targeted amendments to better protect investors and address significant operational concerns. ICI continues to advocate for additional changes as the bill awaits further consideration in the Assembly Appropriations Committee.
   
• New York: ICI achieved several advocacy successes in New York State. During the legislative session, two priority bills that ICI opposed failed to advance before adjournment: SB 1447A, which would have amended New York’s champerty framework in a manner that weakened creditors’ rights, and SB 9072A, a climate-related corporate disclosure bill modeled after California’s framework. In addition, following sustained engagement with the New York Department of Financial Services (DFS), the Department proposed eliminating the sunset provision for its bond ETF capital treatment regulation, preserving favorable treatment of qualifying bond ETFs for New York insurers. ICI plans to submit a comment letter supporting the proposal while continuing to advocate for additional improvements to the regulation.

Advocating for Appropriate Fund Regulation in Europe

ICI Chief Global Affairs Officer Tracey Wingate published an op-ed in Investment & Pensions Europe on the progress of the Savings and Investment Union (SIU) in the EU. Wingate argued on behalf of reducing unnecessary frictions that limit investor participation and market depth as important developments were being made in securitisation frameworks and the Market Integration and Supervision Package (MISP), two separate issues closely linked by the final goal of turning savings into productive investment. 

In June, ICI convened a high-level roundtable in Brussels with CEO Eric Pan on the valuation of private credit in regulated fund structures, bringing together senior policymakers and industry leaders. The discussion focused on how products, including European Long-Term Investment Funds (ELTIFs), are evolving to provide European retail investors with greater access to private markets, and what this means in practice for valuation, product design, and investor outcomes. 

Asia-Pacific Advocacy

ICI visited Mumbai and Delhi in June to engage with Indian policymakers, regulators, and market participants. ICI met with the Honourable Minister of Commerce & Industry, Piyush Goyal, and with officials from the Ministry of Finance, the Securities and Exchange Board of India (SEBI), and the Reserve Bank of India, as well as senior financial industry leaders. Officials encouraged ICI to share practical recommendations on how to address frictions affecting foreign investors and measures to improve market efficiency, expressing strong interest in attracting foreign investment and deepening capital markets.

Meanwhile, ICI submitted a response to a consultation by the Investment Management Association of Japan (IMAJ) on proposed revisions to the framework governing the use of liquidity management tools (LMTs) by Japanese investment trusts. The proposal reflects Japan’s efforts to implement IOSCO’s 2025 recommendations. In our response, ICI expressed agreement with Japan’s proportionate approach to the recommendations but emphasized that fund managers should retain discretion to determine the calibration and activation of LMTs based on the characteristics, redemption profiles, and market conditions applicable to each fund.

Supporting Members

Helping Make Trump Accounts Work for Families and the Fund Industry

Trump Accounts officially launched on July 4, creating a new opportunity to introduce children to saving and investing from birth. ICI has supported the program since it was first proposed, while consistently advocating for an open, competitive marketplace that preserves investor choice and enables a broad range of qualified firms to participate. Since enactment, ICI has worked closely with members, the White House, the Treasury Department, and the IRS to identify and address the operational, tax, custodial, rollover, investment, and servicing questions that will shape the program’s success.

ICI has submitted a roadmap for successful implementation, participated in a Treasury-hosted roundtable on employer contributions, met with policymakers alongside member firms, and provided members with ongoing guidance and issue tracking. ICI was also the first trade association to announce matching contributions for employees with eligible children, including parents of foster children. As additional guidance is released, ICI will continue pursuing practical and legislative solutions that help Trump Accounts scale effectively, give firms the clarity needed to participate, and help more American children build long-term financial security.

ICI Reports Annual 401(k) and IRA Trends

In July, ICI released its annual Research Perspective on 401(k) plan servicing, The Economics of Providing 401(k) Plans: Services, Fees, and Expenses, 2025. 2025 saw the trends in decreasing expense ratios and loads continue, both in the funds available to 401(k) participants and the actual funds they choose to invest in. According to ICI data, 76% of 401(k) plan equity mutual fund assets, including both active and index investment styles, were invested in equity mutual funds with expense ratios of less than 0.50%.

A similar trend is apparent in IRA fees, as ICI published in a recent fact sheet. Like other mutual fund investors, IRA mutual fund investors have benefited from the downward trend in fund expense ratios, and IRA assets similarly show a trend toward concentrating in the lowest-cost fund options.

Analyzing Tokenization Models on Behalf of the Industry

Realizing the potential of tokenized shares of regulated funds will require a regulatory framework set up to protect investors and promote choice and competition. However, the policy discussion around the tokenization of securities has lacked a thorough examination of what the changes could mean for regulated funds and their investors. To inform this discussion, ICI has released a white paper, Tokenization: An Asset Management Perspective, providing a thorough analysis of the potential benefits and pitfalls of tokenization as they apply to the regulated funds industry. ICI General Counsel Paul Cellupica and Associate General Counsel Tim White have also co-written a blog that summarizes the paper’s findings.

Increasing Efficiency and Transparency for Financial Intermediary Relationships

ICI has released an updated version of the Financial Intermediary Controls & Compliance Assessment (FICCA) Framework, the standard framework for financial intermediaries to provide information about the effectiveness of controls related to key operational areas since 2008. This major revision, the first since 2020, gives the framework the option of including 529 plans serviced on subaccounting platforms and also clarifies responsibilities around the 17 areas of focus. The FICCA working group ensures the framework is streamlined, flexible, and current, and that it remains consistent with AICPA standards governing attestation engagements and responsive to user feedback. 

ICI and EBRI Release New Research on Target Date Fund Investors

New research from the Employee Benefit Research Institute (EBRI) and ICI, A Closer Look at 401(k) Plan Target Date Fund Investors’ Account Balance Asset Allocations Over Time, offers a clear picture of the durability and flexibility of target date fund (TDF) investing. The study looks at the behavior of 700,000 participants who were fully invested in TDFs at year-end 2016, and follows them through year-end 2022. The study found that most participants remained fully invested in target date funds.

In the News

	ICI said it has had two meetings with Treasury officials, who at one stage discussed “shutting this down in some form or another,” according to Mike Horn, the group’s deputy general counsel. As part of those discussions, Treasury considered labeling certain conversions a “transaction of interest,” a designation for deals that the Internal Revenue Service and Treasury see as having tax-avoidance potential. ICI added that the Treasury is still assessing 351 conversions and it may be that no action is forthcoming in the end. Read the article
	“CITs are a well-regulated vehicle overseen by sophisticated federal and state bank regulators, and CIT trustees and asset managers are subject to ERISA’s high fiduciary standards,” said Stephen Bradford, a spokesperson for the Investment Company Institute, an asset management industry body. “Investors can be confident that they are protected if they're investing in a CIT.” Read the article
	Erica Richardson, a spokesperson for the Investment Company Institute, welcomed the administration’s push to expand voluntary retirement savings, saying: “The Administration wants to build—let’s work together to build on the foundation already in place to deliver more savings for more American families.” Read the article
	Shelly Antoniewicz of the Investment Company Institute points to a resilient U.S. economy, highlighting strength in the labor market, consumer spending, and business investment. She also underscores strong ETF adoption while noting inflation pressures and expectations for tighter Fed policy. Watch the video