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Institute Comments on Issues Relating to Collective Investment Funds
Washington, DC, October 1, 2002 - The Institute recently submitted two comment letters to the International Organization of Securities Commissions (IOSCO) supporting IOSCO proposals regarding “collective investment funds.”
In its first letter, the Institute responds to an IOSCO committee report examining individual jurisdictions’ performance presentation standards for funds in advertisements and other marketing materials. The Institute expresses strong support for a statement of general principles for the presentation of funds’ performance information, which was drafted by the IOSCO committee, and encourages IOSCO in its efforts to consider the comprehensiveness and effectiveness of their performance presentation standards in order to enhance investor protection.
In a second letter, the Institute addresses another IOSCO committee report that discusses how “collective investment funds” and their investment managers exercise voting rights in connection with portfolio securities. The Institute responds to three questions posed by the committee’s report, and provides the committee with information about the policies, procedures, and practices of funds with respect to voting of portfolio securities. The Institute discusses its position on several issues, including:
- funds’ duty to exercise voting and other shareholder rights or otherwise become involved in the governance of corporations in its portfolio;
- who can make decisions about voting and other shareholder rights attached to a fund’s portfolio securities and how these decisions should be made; and
- whether a fund should provide information to its investors about how a fund’s rights as a shareholder would be exercised.