To comply with changing international privacy requirements, ICI informs its visitors that we use cookies on our web site. ICI only uses cookies to allow subscribers and members to more easily use our site and to record site utilization. No personal or private information is gathered or stored. More details, including how to disable cookies, can be found on our privacy and cookie policy page. If you disable cookies, you will see this message on future visits to our site. Please click the enable button to consent to accepting cookies.
  • ICI Global
  • Independent Director's Council
Sign In  |  Forgot Password?
Advanced | Tips
  • Home
  • Policy Priorities
    • Fund Regulation
    • Retirement Security
    • Trading & Markets
    • Fund Governance
    • Taxes
    • ICI Comment Letters
  • Research & Statistics
    • Industry Research
    • Investor Research
    • Retirement Research
    • Statistics
  • Government Affairs
    • Financial Services
    • Retirement Security
    • Tax
    • Testimony
  • Industry Operations
    • Fund Accounting, Financial Reporting, and Valuation
    • Fund Distribution, Fund Clearance, and Settlement
    • Operations, Transfer Agent Servicing, and Recordkeeping
    • Portfolio Security Operations
    • Resource Centers
    • Technology, Business Continuity, and Information Security
  • News & Media
    • Media Contacts
    • News Releases
    • Blog: ICI Viewpoints
    • Speeches & Commentaries
    • Opinions & Responses
    • Videos
  • Publications & Resources
    • Resource Centers
    • Frequently Asked Questions
    • Fact Books
    • Research Publications
    • White Papers
    • Annual Reports
    • Service Directory
  • Events
    • ICI Events
    • ICI Global Events
    • IDC Events
    • Past Event Highlights
    • Sponsorship Opportunities
    • Event Contacts
  • About ICI
    • Mission & History
    • Board & Leadership
    • Membership
    • Annual Reports
    • ICI Education Foundation
    • Business Continuity
    • Careers
    • Contact Us

TOPICS

401(k)
Bond Fund
Bonds
Commodity Investments
Cybersecurity
Equity Investing
Europe
Events
Exchange-Traded Funds
Federal Reserve
Financial Markets
Financial Stability
Fixed Income
Fund Governance
Fund Regulation
GMM
Global
Government Affairs
ICI Global
IDC
Index Fund
Interest Rate
International
Investment Education
Investor Research
Money Market Funds
Mutual Fund
Operations and Technology
Policy Research
Retirement Policy
Retirement Research
Savings
Shareholder
Taxes
Trading
Treasury

ARCHIVE

  • 2018
    • March
    • February
    • January
  • 2017
    • December
    • November
    • October
    • September
    • August
    • July
    • June
    • May
    • April
    • March
    • February
    • January
  • 2016
    • December
    • October
    • September
    • August
    • July
    • June
    • May
    • April
    • March
    • February
    • January
  • 2015
    • December
    • November
    • October
    • September
    • August
    • July
    • June
    • May
    • April
    • March
    • February
    • January
  • 2014
    • December
    • October
    • September
    • August
    • July
    • June
    • May
    • April
    • March
    • February
    • January
  • 2013
    • December
    • October
    • September
    • August
    • July
    • June
    • May
    • April
    • March
    • February
    • January
  • 2012
    • December
    • November
    • October
    • September
    • August
    • July
    • June
    • May
    • April
    • March
    • February
    • January
  • 2011
    • December
    • November
    • October
    • September
    • August
    • July
    • June
    • May
    • April
    • March
    • February
    • January
  • 2010
    • December
    • November

Home Viewpoints

Print this page

Washington Post Mischaracterizes the Strongest Federal Securities Law

By Paul Schott Stevens

April 20, 2012

Today I submitted the following letter to the editor of the Washington Post:

Without a doubt, our federal securities laws and the regulations that implement them may be improved and are worthy subjects for journalistic scrutiny. David Hilzenrath wasted an opportunity to advance that discussion with his recent article. Rather than focus on genuine weaknesses in the system, he mischaracterizes and criticizes the strongest law in the federal securities arsenal and a regulatory tool that has brought untold benefits to investors.

That law is the Investment Company Act of 1940, the most detailed and prescriptive law of the four federal securities laws. When Congress passed this landmark legislation, it recognized that the Act’s tight limits on mutual funds and other registered investment companies could stifle innovation and flexibility. So Congress intentionally gave the SEC, as the qualified regulator with a strong investor-protection mission, an important tool: the ability to provide exemptive orders in cases where an exemption is “necessary or appropriate in the public interest” and “consistent with the protection of investors,” and therefore in keeping with the purposes of the law. 

Exemptive orders allow the SEC to update and modernize its regulations in light of market developments or industry innovations. Without exemptive orders, today’s investors would be denied many investment options, including exchange traded funds, money market funds, funds of funds, multi-manager funds, variable annuities and much more.

The SEC does not grant exemptions easily. Each application is carefully considered by the SEC’s staff, and only granted under detailed conditions fully satisfying the staff that investors will remain protected from any potential abuse. It often takes funds months, or even years, to obtain an exemptive order.

The flexibility to authorize exemptions has long been considered an invaluable tool for securities regulation. That is why Congress expressly gave the SEC this authority. Characterizing what the SEC does pursuant to that authority as “giving companies permission to ignore the law” is altogether inaccurate and unfair.

Reporting of this kind is a disservice to your readers.

Paul Schott Stevens
President and CEO
Investment Company Institute

Paul Schott Stevens is President and CEO of the Investment Company Institute.

TOPICS: Fund Regulation


top
  • About ICI
  • About IDC
  • About ICI Global
  • Privacy and Cookie Policy
  • Apply for User Account
  • Business Continuity
  • Contact ICI

Copyright © 2018 by the Investment Company Institute