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ARCHIVE
2020 Annual Report to Members: Roundtable: The Fund Industry’s Response to COVID-19
By Patrice Bergé-Vincent, Marty Burns, and Susan Olson
January 19, 2021
For the 2020 Annual Report to Members, three members of ICI’s leadership sat down to share their thoughts on how the Institute and the fund industry have navigated the COVID-19 crisis.
Below is an abridged version of their discussion. To read the full roundtable, please see ICI’s 2020 Annual Report to Members.
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Patrice Bergé-Vincent Managing Director ICI Global |
Marty Burns Chief Industry Operations Officer ICI |
Susan Olson General Counsel ICI |
COVID-19 has ushered in a new everyday reality for the fund industry. Take us back to those hectic weeks in March. How did ICI engage with policymakers to support members and their shareholders during this uniquely challenging time?
Olson: Those early weeks were unlike anything we had ever been through—and they certainly came at us fast. But our approach didn’t stray too far from how we’ve handled other challenging situations.
By that I mean, huddling with members to discuss what they were seeing in the markets—what funds and their shareholders were experiencing—and then meeting with policymakers to share that on-the-ground perspective.
This approach guided our engagement with senior officials at Treasury and the Federal Reserve Board, which helped inform their efforts to calm the markets. Same for our discussions with the SEC [Securities and Exchange Commission] and staff, which helped us secure relief to give funds another tool to manage their liquidity, just in case they needed it.
Bergé-Vincent: Here in Europe, we were engaged with policymakers in a wide range of areas. But none more important, I think, than our work to keep financial markets from closing in response to the volatility triggered by the pandemic and the shutdowns of economies.
As the crisis ramped up, we stood shoulder-to-shoulder with other market participants against calls for the markets to close, and led a global effort urging policymakers to commit publicly to keeping them open.
Our thinking here was that such a commitment would assure citizens and businesses that they wouldn’t lose access to funding when they needed it most. And we’re grateful that, in the end, not a single European country closed its markets.
What about supporting members’ own responses to the crisis? ICI was quite active there as well.
Burns: Very much so. Every week—and often more frequently than that—our committees were holding calls for pretty much every area of the industry. Operations, law, the risk officers, the compliance folks—everyone. At times we had several hundred people on a single call—from firms of every size and style you can think of.
Having this holistic view of the fund complex—of the fund business—ensured that our support would reach the entire membership, not just parts of it. Plus, in working with other trade groups, we were able to minimize any bottlenecks that might have disrupted the transaction process or kept the delivery of services to shareholders from running smoothly.
Olson: I would add that our frequent member surveys also played a key role here. Members told us regularly that having a broad understanding of the challenges brought on by the crisis—and responses to it—helped them better assess and improve their operations and compliance efforts.
Why do you think you were able to draw such robust participation?
Burns: You know, members have long turned to our committees as a place for practical, productive discussion to enhance operations for the benefit of fund shareholders.
In times of crisis, this type of forum becomes even more critical. And I think so many folks joined, one, because they were eager for information to bring back to their firms, and two, because they wanted to be a part of the regulatory and operational solution themselves—and turn this information into action.
Data security has been huge.
Burns: You’re telling me. Our members are always working with highly sensitive information, and they never stop working to ward off cyberattacks.
But the number of attacks we’ve seen since the crisis hit—the sophistication of them—it’s all been on another level. So members have had to dedicate an enormous amount of energy and resources to shore up their cyberdefenses, get them in place at people’s homes, and reinforce sound cyberhygiene practices among their staffs.
I’d like to now fast-forward some, and zoom out a bit beyond the fund industry. Because even as markets have calmed, economies continue to reel.
Patrice, that’s certainly true in Europe, which is suffering its worst economic shock since World War II. What role can regulated funds play in Europe’s efforts to restore economic growth, and how is ICI engaging here?
Bergé-Vincent: Well, we’ve been saying it since long before the pandemic. The key to unlocking the EU’s economies is a robust Capital Markets Union—one that promotes a greater role for market-based financing and encourages more retail-investor participation.
The same is true now, only the need is even more urgent. And regulated funds—because they’ve proven so useful for growing household savings and channeling investment to businesses—are well positioned to address this need.
We’ve emphasized these points to the European Commission in recent months. And the Commission’s new Capital Markets Union Action Plan would suggest that our recommendations haven’t gone unnoticed.
A lot remains to be done, though. The EU’s recovery plan relies for the time being on financing from bank loans and taxpayer money. Those are important sources of financing—don’t get me wrong—but they alone won’t be nearly enough to deliver a lasting recovery. So our advocacy looking forward will center on showing policymakers why increased retail investor participation in EU capital markets through regulated funds is the missing piece.
You’ve all worked in and around the fund industry for quite some time, and navigated ICI through more than a few challenges. But I have to ask—what has this crisis taught you about the industry?
Burns: What I’ve learned is, the industry is even more resilient than we thought. Thinking about that shift to remote work, few of us had ever contemplated something at such a scale and speed.
Yet everyone—and I mean, everyone—really stepped up to ensure that service to shareholders wouldn’t suffer.
Bergé-Vincent: It’s kind of like everyone in the industry has been put through this big test—a test of tests, if you will. The fact that we’re still going strong should give us all confidence that whatever challenges come our way, we can overcome them. Together, we are stronger. That’s the big lesson for me.
Olson: And I think that’s heartening. Over the past 80 years, funds have evolved constantly to meet the needs of their shareholders, but the industry had never had to navigate something like this.
Now, we know that wholesale change doesn’t have to be scary. It doesn’t have to worry us. Instead, it can be a spark for serving shareholders even better in the future.
Susan Olson is general counsel and Marty Burns is chief industry operations officer at ICI. Patrice Bergé-Vincent is managing director of ICI Global.
Permalink: https://www.ici.org/viewpoints/21_view_arroundtable
TOPICS: Financial MarketsFinancial StabilityFund RegulationGlobalGovernment AffairsICI GlobalIndex FundInternationalInvestor ResearchMutual FundPolicy ResearchRetirement PolicyShareholder
2020 Annual Report to Members: A Conversation with Paul Schott Stevens
By Paul Schott Stevens
January 14, 2021
Paul Schott Stevens, ICI’s longest-serving chief executive, retired at the end of 2020. As he neared the end of his 16 years of service, he sat down with ICI staff to discuss the events of his tenure.
TOPICS: Financial MarketsFinancial StabilityFund RegulationGlobalGovernment AffairsICI GlobalIndex FundInternationalInvestor ResearchMutual FundPolicy ResearchRetirement PolicyShareholder
2020 Annual Report to Members: A Letter to ICI’s Membership
By George C. W. Gatch
January 11, 2021
2020 will go down in history as a year that none of us can ever forget. It was a year of turmoil, fear, and reckoning. Yet for the regulated fund industry, it also proved to be a year of resilience, transition, and great hope.
Read more from ICI Chairman George C. W. Gatch’s letter that was released in ICI’s 2020 Annual Report to Members.
TOPICS: Financial MarketsFinancial StabilityFund RegulationGlobalGovernment AffairsICI GlobalIndex FundInternationalInvestor ResearchMutual FundPolicy ResearchRetirement PolicyShareholder
Value Is in the Eye of the UCITS Holder
By Giles Swan
December 3, 2020
ICI research shows a steady decline in the cost of UCITS investing. European regulators are looking beyond just declining cost, however, by requiring UCITS managers to justify the value of these funds to investors. But how do investors assess value relative to cost, and what is the role of regulators?
TOPICS: Equity InvestingEuropeFund RegulationICI GlobalInternationalShareholder
A New Benchmark for Distribution Oversight
By Ahmed Elghazaly
July 21, 2020
On June 1, the fund industry achieved a milestone for global cooperation. In an industry-led agreement, fund distributors and fund managers of Undertakings for the Collective Investment in Transferable Securities (UCITS) and alternative investment funds (AIFs) joined together to issue a common protocol for distribution oversight.
TOPICS: EuropeFund GovernanceFund RegulationGlobalICI GlobalInternationalOperations and TechnologyShareholder
2020 Investment Company Fact Book: Letter from the Chief Economist
By Sean Collins
May 19, 2020
A version of this letter by ICI Chief Economist Sean Collins was released in the Institute’s 60th edition of the Investment Company Fact Book.
TOPICS: Financial MarketsFund RegulationGlobalInvestor ResearchMutual FundPolicy ResearchRetirement PolicyRetirement ResearchSavingsShareholder
2020 Investment Company Fact Book: Letter from the President and CEO
By Paul Schott Stevens
May 13, 2020
This ICI Viewpoints is a version of a letter from ICI President and CEO Paul Schott Stevens that was released in the 60th edition of the Investment Company Fact Book.
TOPICS: Financial MarketsFund RegulationGlobalInvestor ResearchMutual FundPolicy ResearchRetirement PolicyRetirement ResearchSavingsShareholder
For Funds' Use of Derivatives, a Promising New Regulatory Framework
By Paul Schott Stevens
April 22, 2020
In a promising new proposal on the use of derivatives, the SEC has consolidated cumbersome regulatory framework into a single, comprehensive rule that is carefully designed to protect investors.
TOPICS: Equity InvestingExchange-Traded FundsFund RegulationMoney Market FundsMutual FundShareholder
A New Chapter of Growth and Impact: IDC’s 2019 Annual Review
By Thomas Kim
February 18, 2020
In a letter in the Independent Directors Council's 2019 Annual Review, IDC Managing Director Thomas Kim discusses the beginning of his role as head of IDC....
ICI Continues Its Work on Disclosure Improvements
By Paul Schott Stevens
February 12, 2020
In a letter to the New York Times in response to an article published earlier this month, ICI President and CEO Paul Schott Stevens refutes claims that ICI and the Securities and Exchange Commission (SEC) are seeking to "water down" disclosure requirements....
TOPICS: Fund RegulationMutual FundShareholder
ICYMI: A Q&A with Members of ICI's Retirement Team
November 19, 2019
For this year's 2019 Annual Report to Members, four members of ICI's retirement team sat down to discuss ICI's legislative, regulatory, research, and communications activities to advocate for well-informed public policies that help Americans prepare for retirement....
TOPICS: 401(k)Fund RegulationGovernment AffairsMutual FundRetirement PolicyRetirement ResearchShareholder
2019 Annual Report to Members: A Letter to ICI's Membership
By George C. W. Gatch and Paul Schott Stevens
November 14, 2019
What follows is an abridged version of a letter by ICI Chairman George C. W. Gatch and ICI President and CEO Paul Schott Stevens that was released in ICI’s 2019 annual report. To read their full letter, please see ICI’s 2019 Annual Report to Members....
TOPICS: Financial MarketsFinancial StabilityFund RegulationGlobalGovernment AffairsICI GlobalIndex FundInternationalInvestor ResearchMutual FundPolicy ResearchRetirement PolicyShareholder
Closed-End Funds: Opportunities for a True Renaissance
By Dorothy Donohue and Kenneth Fang
November 5, 2019
Closed-end funds are in vogue once again. Legislators, regulators, and fund sponsors are turning to the structure as a promising vehicle for retail investment and capital formation. And recent government actions are positive steps that can lead to a deeper pool of closed-end funds. With a few critical tweaks, this legislation and related regulatory action could stimulate further growth and better deliver on that promise....
TOPICS: Equity FundFund RegulationShareholder
The ETF Rule: Paving the Way for Further Growth and Success
By Jane Heinrichs
October 10, 2019
For tens of millions of Americans, mutual funds and exchange-traded funds (ETFs) are the most convenient, cost-effective, transparent, and well-regulated tools available to meet their important financial goals. Both investment vehicles are governed by the Investment Company Act of 1940, but ETFs have long needed their own set of uniform regulations under the Act.
The SEC rightly recognized this by recently adopting Rule 6c-11—otherwise known as “the ETF rule.” The SEC’s rule is the next step in the evolution of ETFs and will foster greater transparency, innovation, and competition, enabling more investors to realize their benefits.
TOPICS: Exchange-Traded FundsFund Regulation
Four Wrongs Don’t Make a Right—A Financial Stability Proposal Falls Short
By Susan Olson
September 16, 2019
After the global financial crisis, the Dodd-Frank Act of 2010 set up a regulatory framework to identify and mitigate threats to financial stability. Since then, regulators and industry have taken many actions to make financial markets and market participants more resilient. Yet a new proposal calling for further reform fails to take this progress into account, instead offering an action plan that’s likely to create—not solve—problems in promoting financial stability.
2019 Investment Company Fact Book: Letter from the Chief Economist
By Sean Collins
May 7, 2019
Globalization has hit a few speed bumps in recent years, but it hasn't slowed the globalization of the Investment Company Fact Book. Consistent with ICI’s mission to represent the interests of regulated funds and their investors worldwide, Fact Book is expanding its international presence....
TOPICS: Financial MarketsFund RegulationGlobalInvestor ResearchMutual FundPolicy ResearchRetirement PolicyRetirement ResearchSavingsShareholder
SEC Chairman Jay Clayton Tackles Hot Topics at GMM
By Garrett Hawkins
May 2, 2019
In introducing SEC Chairman Jay Clayton ahead of his highly anticipated appearance at ICI’s 61st annual General Membership Meeting this morning, ICI President and CEO Paul Schott Stevens praised the chairman’s “erudition, dedication, and acumen” in leading the Commission. And during their 40-minute conversation—which tackled some of the top issues facing funds and their investors—each of those qualities was on show.
TOPICS: Financial MarketsFund RegulationGMM
A Year of Advocacy: IDC’s 2018 Annual Review
Amy B. R. Lancellotta
January 31, 2019
IDC is well known for its education and outreach programs—and it’s not hard to see why. Year after year, they provide fund directors with opportunities to hone their craft and connect with one another, equipping them with the tools they need to thrive in their oversight role for the benefit of fund shareholders....
ICI’s 2018 Annual Report: Letter from the President
By Paul Schott Stevens
December 3, 2018
A version of this letter by ICI President and CEO Paul Schott Stevens was released in the Institute’s 2018 Annual Report.
Fund industry watchers will remember this year as one of important policy developments, including some that have been the subject of years of debate. The Investment Company Institute has been deeply engaged in this wide range of issues, working on both legislative and regulatory fronts to promote advantageous outcomes for regulated funds and their shareholders....
TOPICS: Exchange-Traded FundsFinancial MarketsFund RegulationGlobalIDCOperations and TechnologyRetirement Policy
Common Ownership: "Puffery" in the Legal Analysis
By Mike McNamee
December 3, 2018
Proponents of the common ownership hypothesis presume that the economic debate over the competitive effects of institutional investing is settled. But a new paper from Douglas H. Ginsburg, judge on the US Circuit Court of Appeals for the District of Columbia Circuit, and Keith Klovers, a judicial clerk on that court, finds that those proponents "substantially overstate the validity and strength of the existing empirical work" on common ownership....
TOPICS: Financial MarketsFund RegulationPolicy ResearchShareholder
Common Ownership: Ignoring the Age-Old Conflict Between Owners and Managers
By Mike McNamee
November 30, 2018
In his first public remarks as a member of the Federal Trade Commission, Commissioner Noah Joshua Phillips tackled what he called “the common ownership story”—and concluded that “this ‘economic blockbuster’ seems a little light on plot.” And like many other experts, Commissioner Phillips sees problems with both the empirical evidence and the theoretical basis for the claim of anticompetitive harm....
TOPICS: Financial MarketsFund RegulationPolicy ResearchShareholder
Common Ownership: Faulty Assumptions on Investors’ ‘Economic Interests’
By Mike McNamee
November 29, 2018
In a new paper, scholars Thomas A. Lambert and Michael E. Sykuta find that proponents of the common ownership hypothesis don’t understand—or even attempt to consider—the actual economic interests and incentives of asset managers and their fund clients....
TOPICS: Financial MarketsFund RegulationPolicy ResearchShareholder
SEC Should Reject Complex, Costly “Pass-Through” Proxy Voting
By Paul Schott Stevens
October 2, 2018
Policymakers and regulators at the US Securities and Exchange Commission (SEC) have renewed their interest in proxy voting issues recently. Among the items under discussion at an upcoming SEC Roundtable is the idea that a fund would only be allowed to vote on portfolio company proxies after the fund asks its own shareholders how the fund should vote. In essence, this would “pass through” to fund shareholders the decision of how corporate proxies would be exercised. Even the briefest consideration demonstrates how misguided and impractical the idea is—and why it should go no further.
TOPICS: Fund GovernanceFund RegulationProxy VotingShareholder
Fund Adviser Proxy Votes Align with Fund Interests
By Paul Schott Stevens
September 24, 2018
A key assertion in “Cracking the Proxy Racket” (The Wall Street Journal's Review & Outlook, September 18) is that asset managers vote “in block” to support recommendations set forth by advisory firms like Glass Lewis and Institutional Shareholder Services. Such statements ought to be tested against actual data.
A decade’s worth of research shows that fund advisers vote proxies diligently, in line with their fiduciary duty to the fund and its shareholders...
TOPICS: Fund GovernanceFund RegulationIndex FundMutual FundProxy VotingShareholder
“Common Ownership” Hypothesis Is Unconvincing
By Sean Collins and Susan M. Olson
August 22, 2018
Economists and legal scholars have issued pointed critiques and empirical rebuttals of the “common ownership” hypothesis—the notion that institutional investors holding small, non-controlling stakes in competing companies in concentrated industries decrease competition and raise consumer prices. Yet the issue continues to draw attention and is one of a long list of topics that the Federal Trade Commission (FTC) will include in upcoming hearings on competition and consumer protection.
In response, the Investment Company Institute (ICI) has submitted a comment letter to the FTC to provide a factual baseline on key elements of the discussion to help dispel misrepresentations underlying the common ownership hypothesis.
TOPICS: Fund RegulationPolicy ResearchShareholder
SEC Commissioner Michael Piwowar: A Commitment to Markets, Shareholders...and Facts
By Rachel McTague
May 24, 2018
SEC Commissioner Michael Piwowar responded with candor to questions posed by ICI President and CEO Paul Schott Stevens during a lively discussion at the final day of ICI’s General Membership Meeting. Piwowar’s announced July 7 departure from the agency offered the outspoken commissioner the opportunity to reflect on fund regulation during his five-year tenure....
TOPICS: Exchange-Traded FundsFinancial StabilityFund RegulationGMMMutual Fund
2018 Investment Company Fact Book: Letter from the Chief Economist
By Sean Collins
May 15, 2018
Those of us who wear glasses know that one of the most crucial elements in seeing the world is the right lens. A bad lens warps the light and distorts the signals; the right lens sharpens the image and enhances our understanding.
This is a useful metaphor for the work that ICI Research does in providing informed analysis to guide public policy. Through our voluminous collections and surveys, we gather large amounts of data—signals about the behavior of funds, markets, and investors. But finding the patterns in these signals requires the right lens—accumulated knowledge provided by context, economic insights, and understanding of institutions.
The Investment Company Fact Book is one very visible result of this process and its many elements...
TOPICS: Financial MarketsFund RegulationInvestor ResearchMutual FundPolicy ResearchRetirement PolicyRetirement ResearchSavingsShareholder
Education, Outreach, Advocacy: A Big 2017 for IDC and Fund Independent Directors
By Amy B. R. Lancellotta
February 8, 2018
The following appeared as the “Letter from the Managing Director” in IDC’s 2017 Annual Review.
If there has been a single constant across the 13-year history of the Independent Directors Council (IDC), it’s the stability of our four-part mission...
TOPICS: Fund GovernanceFund RegulationIDCMutual Fund
States Are Abusing Abandoned-Property Funds to Plug Budget Shortfalls
By Tamara K. Salmon
January 11, 2018
Imagine finding out that your investment account has been turned over to your state because it was considered “abandoned.” Imagine, too, that after the account was turned over to the state, the account received a capital gains distribution. As a result, you are liable for paying the taxes on that distribution—and can be assessed monetary penalties for not paying the taxes in a timely fashion.
TOPICS: Fund RegulationGovernment AffairsMutual FundRetirement PolicySavingsShareholderTaxes
Independent Directors’ Stringent Oversight Contributes to Decline in Fund Fees
By Amy B. R. Lancellotta
January 9, 2018
The following ICI Viewpoints is a letter to the New York Times by Amy B. R. Lancellotta, managing director of the Independent Directors Council, in response to an article published on December 30, 2017.
TOPICS: Fund GovernanceFund RegulationMutual FundShareholder
More People Are Building Nest Eggs with Their IRAs
By Sarah Holden
December 20, 2017
Individual retirement account (IRA) owners are good stewards of their money. They take a thoughtful approach to preparing for retirement by taking advantage of the dual role of IRAs and by researching important investment decisions, according to recent research from ICI. These are among the findings from “The Role of IRAs in US Households’ Saving for Retirement, 2017,” which details ICI’s research on IRA-owning households.
TOPICS: 401(k)Fund RegulationInvestor ResearchMutual FundRetirement Research
Congress Must Spike “FIFO” for All Investors
By Paul Schott Stevens
December 8, 2017
As the House and Senate reconcile their differing versions of tax reform, one provision from the Senate’s bill should be deleted immediately. Tax reform must not impose an accounting system known as “first-in, first-out” (FIFO) that would deprive America’s investors of their long-standing ability to manage their finances for the greatest tax efficiency.
TOPICS: Fund RegulationGovernment AffairsMutual FundRetirement PolicyTaxesTrading
A Way Forward on Modernizing Fund Director Responsibilities
By Amy B. R. Lancellotta
November 14, 2017
In recent years, the workload for boards of US regulated funds has grown heavier and more complex—owing in part to the fund industry’s growth and evolution, but due largely to a raft of new responsibilities established in Securities and Exchange Commission (SEC) rulemakings and other initiatives.
2017 Annual Report to Members: A Message from the Chairman
By William F. “Ted” Truscott
November 13, 2017
This letter by ICI Chairman Ted Truscott was released in our 2017 Annual Report to Members.
Every day, I’m reminded that each of us in the fund industry is driven to deliver ever-greater value for our fees and keep improving service to fund shareholders. Investors are demanding more from every asset manager—and the resulting competition drives us to innovate, find new efficiencies, and offer even better solutions for investors’ needs.
TOPICS: Financial MarketsFinancial StabilityFund RegulationGlobalGovernment AffairsICI GlobalIndex FundInternationalInvestor ResearchMutual FundPolicy ResearchRetirement PolicyShareholder
Let’s Make Disclosure Reform Serve Shareholders
By Dorothy Donohue
October 25, 2017
The October 12 meeting of the Investor Advisory Committee (IAC)—a group established by the Dodd-Frank Act to advise the Securities and Exchange Commission (SEC) on regulatory priorities and other issues—has breathed new life into a long-running debate over how US-registered funds can best provide essential information to their shareholders.
TOPICS: Financial MarketsFund RegulationInvestor ResearchMutual FundShareholder
Applying Evidence to Theories on Regulated Funds
By Sean Collins
October 12, 2017
Late last month, the Financial Stability Oversight Council (FSOC) voted to rescind its designation of American International Group (AIG). After requiring a bailout during the financial crisis, the insurer was designated as a non-bank “systemically important financial institution,” or SIFI, in 2013. When FSOC conducted its most recent annual review, it decided AIG no longer warranted “systemic” status.
TOPICS: Bond FundEquity InvestingFinancial MarketsFinancial StabilityFund RegulationMutual FundTreasury
Cybersecurity at Work: To Confront Evolving Threats, Flexibility Is Key
By Peter Salmon
October 3, 2017
In the previous installment of this series, I examined a few ways to think about the cyberthreats facing us, and thus to guard against them more effectively. Now, with organizations in every sector of the US economy facing increased pressure to safeguard corporate and client data or suffer potentially ruinous damage to their operations and reputation, it seems that some regulators think they should dictate what’s best for all of us, regardless of individual firm circumstances.
TOPICS: CybersecurityFund RegulationOperations and Technology
Simulating a Crisis
By Sean Collins
August 15, 2017
The Bank of England (BoE) recently published a paper detailing results from a simulation intended to “stress-test” open-end investment funds. The paper suggests that under “severe but plausible” assumptions, investors could redeem so heavily from open-end investment funds (e.g., mutual funds or UCITS funds) during a period of market stress that they could cause “dislocations” in corporate bond markets.
TOPICS: Bond FundEuropeFinancial MarketsFinancial StabilityFixed IncomeFund RegulationGlobalInternationalMutual FundPolicy Research
New ICI Paper Helps Readers Understand ETF Listing Processes and Standards
By Jane Heinrichs and Kenneth Fang
August 10, 2017
Exchange-traded funds (ETFs) have been a part of US markets for more than 20 years, and they remain some of the most highly regulated financial products, subject to multiple and sometimes overlapping statutory schemes.
TOPICS: Exchange-Traded FundsFinancial MarketsFund RegulationInvestment Education
DOL Fiduciary Rule Review Is Opportunity for SEC
By Paul Schott Stevens
August 8, 2017
The following ICI Viewpoints is an op-ed by Paul Schott Stevens that was published in InvestmentNews on August 7, 2017.
Securities and Exchange Commission (SEC) Chairman Jay Clayton deserves credit for his decisive action inviting public feedback on the standards of conduct for financial advisers to retail investors. He now has a critical window of opportunity to press forward and work with the Department of Labor (DOL) to establish a consistent best-interest standard of conduct that applies uniformly across retirement and non-retirement accounts, while preserving investor choice.
TOPICS: Fund RegulationGovernment AffairsMutual FundRetirement Policy
Americans Trust in Their 401(k) Plans
By Sarah Holden
July 7, 2017
Defined contribution (DC) plans have long been a key component of Americans’ retirement savings. And with more than $5 trillion in assets and about 54 million active participants, 401(k) plans are the most common type.
TOPICS: 401(k)Fund RegulationInvestor ResearchMutual FundRetirement Research
Funds Actively Seek Companies’ Sound Management
By Paul Schott Stevens
July 3, 2017
The following ICI Viewpoints is a letter to the Wall Street Journal by Paul Schott Stevens, president and CEO of the Investment Company Institute, in response to an editorial published on June 22, 2017.
In their muddled and inconsistent arguments, the authors of “Index Funds Are Great for Investors, Risky for Corporate Governance” (op-ed, June 22) rely on unfounded assertions while ignoring clear legal requirements placed on registered funds, their boards, and their advisers...
TOPICS: Exchange-Traded FundsFund GovernanceFund RegulationIndex FundMutual FundShareholder
Industry Leaders Highlight Opportunities Presented by Industry Change
By Miriam Bridges
June 1, 2017
Shifts in demographics, regulation, investor preferences, and new product offerings are creating a range of opportunities for the asset management industry. In conversations exploring these evolving trends, industry leaders offered their perspectives on how to succeed in these new environments during two insightful sessions on the second day of ICI’s 59th General Membership Meeting, held May 3–5 in Washington, DC.
TOPICS: EventsFund RegulationGMMInternationalMutual Fund
A Tech-Enabled Future—and Present—for Investment Advice
By Rob Elson
May 30, 2017
The future of investment advice will lie at the intersection of technology and humanity, said panelists at ICI’s 2017 General Membership Meeting. But those panelists—Eli Broverman, cofounder of Betterment; Kelly Coffey, CEO at JP Morgan’s US Private Bank; and Ben Huneke, head of investment solutions at Morgan Stanley Wealth Management—offered differing views on how much of a role people will play.
TOPICS: CybersecurityEventsFund RegulationGMMOperations and Technology
Stevens Calls for Measures to Enhance Economic Growth
By Rachel McTague
May 5, 2017
With America striving to achieve greater economic growth, Paul Schott Stevens, ICI president and CEO, called on the Securities and Exchange Commission (SEC) to enhance funds’ essential role in the capital markets by proposing new rules to govern funds’ use of derivatives and by creating a harmonized best-interest standard for advisers providing investment advice to retail and retirement investors. The ICI chief also urged the SEC to adopt a fund disclosure regime for the 21st century.
TOPICS: EventsFinancial MarketsFinancial StabilityFund RegulationGMMMoney Market FundsMutual Fund
2017 Investment Company Fact Book: Letter from the Chief Economist
By Brian Reid
April 27, 2017
Have you ever tried to put a jigsaw puzzle together without knowing what the finished work should look like? It’s difficult—even with help from family and friends. Are those blue pieces part of a peaceful lake or a cloudless sky? Are those dark pieces a forest floor or storm clouds brewing on the horizon? Without the completed picture on the puzzle box as a guide, everyone has their own idea of what the completed work will look like and how to put it together.
TOPICS: Financial MarketsFund RegulationGovernment AffairsInvestor ResearchMutual FundPolicy ResearchRetirement PolicyRetirement ResearchShareholder
What's the “Exposure” of Money Market Funds to Europe?
By Sean Collins
January 26, 2017
At the American Economic Association (AEA) meetings in Chicago early this month, speakers and attendees at several sessions asked: do money market funds pose systemic risks?
TOPICS: EuropeFederal ReserveFinancial MarketsFinancial StabilityFund RegulationInternationalMoney Market FundsMutual Fund
Mutual Funds and ETFs’ Share of the Corporate Bond Market: What’s the Right Answer?
By Shelly Antoniewicz
January 19, 2017
Participation by mutual funds and exchange-traded funds (ETFs) in US corporate bond markets was a topic of discussion during several sessions held at the American Economic Association Meetings in Chicago earlier this month. Panelists and presenters alike cited “statistics” on the share of corporate bonds held by funds. The funny thing was, they all cited different numbers, running the gamut from 18 to 35 percent.
TOPICS: Bond FundBondsExchange-Traded FundsFinancial StabilityFund RegulationMutual FundPolicy Research
Education, Outreach, Advocacy: A Big 2016 for IDC and Fund Independent Directors
By Amy B. R. Lancellotta
January 17, 2017
The Independent Directors Council (IDC) just wrapped up another year of vigorous support for the fund director community—educating directors, bringing them together to share ideas and experiences, and advocating on their behalf in policy debates. This brief post, adapted from IDC’s 2016 Annual Review, highlights some of IDC’s more notable work over the course of the year.
TOPICS: Fund GovernanceFund RegulationMutual Fund
A Proposal that Should Be Popped
By Paul Schott Stevens
December 15, 2016
The following ICI Viewpoints is a letter to the editor by Paul Schott Stevens, president and CEO of the Investment Company Institute, in response to an op-ed published on December 7, 2016, in the New York Times, “A Monopoly Donald Trump Can Pop.”
Millions of Americans could lose the low costs and broad diversification of fund investing under the dangerous proposal outlined in the op-ed by Posner, Weyl, and Morton.
TOPICS: Bond FundEquity InvestingExchange-Traded FundsFinancial MarketsFund RegulationMutual FundTrading
The Taper Tantrum—Take II
By Shelly Antoniewicz
December 13, 2016
Long-term interest rates in the United States have been on the rise since summer 2016—slowly creeping up from July through October, and then jumping after the presidential election. Thus far, the response from bond mutual fund investors has been subdued. Nevertheless, various commentators—from the vice chairman of the Federal Reserve Board to the multinational Financial Stability Board—have expressed concerns that bond fund investors may rush to redeem shares to avoid portfolio losses stemming from unexpected increases in interest rates.
TOPICS: Bond FundBondsFederal ReserveFinancial MarketsFinancial StabilityFixed IncomeFund RegulationInterest RateMutual FundTreasury
Investor Protection Priorities for the New Year
By David Blass
December 12, 2016
The following ICI Viewpoints is adapted from a presentation that ICI General Counsel David Blass gave to the Investor Advisory Committee of the US Securities and Exchange Commission on December 8, 2016. Visit this page to read the entire presentation.
If I were to poll ICI members about next year’s priorities, I am sure we would receive consistent feedback: give us an opportunity to implement all the rules that have been imposed on us. New rules from the Securities and Exchange Commission (SEC) covering data reporting, swing pricing, and liquidity risk management will require huge expenditures and years of work to implement fully. And they were adopted in the aftermath of two rounds of money market fund reform, as well as many other rules applicable to the fund industry adopted by other regulatory agencies.
TOPICS: Financial MarketsFinancial StabilityFund RegulationOperations and TechnologyShareholder
Fund Fees Have Been Falling for Two Decades
By Paul Schott Stevens
October 19, 2016
The following ICI Viewpoints is a letter to the editor by Paul Schott Stevens, president and CEO of the Investment Company Institute, in response to an editorial published on October 9, 2016, in InvestmentNews, “DOL fiduciary rule may finally spark lower fund fees for mutual funds.” It appeared in the print edition of the publication on October 17, 2016.
TOPICS: Bond FundEquity InvestingFund RegulationInvestor ResearchMutual FundShareholder
Money Market Fund Reforms Combine with Bank Regulations to Boost Interest Rates
By Sean Collins
September 28, 2016
As detailed in the previous ICI Viewpoints in this series, the Securities and Exchange Commission’s (SEC) new rules for money market funds induced a drop in the assets of prime and tax-exempt money market funds of $910 billion since January 2015 and a roughly comparable $872 billion rise in the assets of government money market funds.
TOPICS: Financial MarketsFund RegulationMoney Market FundsMutual FundOperations and Technology
As Money Market Fund Investors Adjust, Funds Have Managed Flows
By Sean Collins
September 27, 2016
The Securities and Exchange Commission’s new rules for money market funds, which must be fully implemented by October 14, largely center around two key reforms.
TOPICS: Financial MarketsFund RegulationMoney Market FundsMutual FundOperations and Technology
For Money Market Funds, Massive Preparation Has Paid Off in Smooth Transition
By Marty Burns
September 26, 2016
First in a series on money market funds.
By October 14, the money market fund industry must fully implement the 2014 money market fund reforms passed by the Securities and Exchange Commission (SEC), cementing major changes for investors and fund complexes. ICI has been in close constant contact with members since the rules were enacted in 2014 and has been working with operations and other professionals throughout the industry to ensure an orderly transition—including fully informing investors—to the new regime in October.
TOPICS: Financial MarketsFund RegulationMoney Market FundsMutual FundOperations and Technology
Revised Fed Data Show Mutual Funds’ Share of Corporate Bond Market Is Small and Stable
By Shelly Antoniewicz
August 26, 2016
Discussions among regulators and the financial press about the role of bond mutual funds in financial stability risks have been fueled by concerns about the size and apparent growth in bond funds’ participation in corporate bond markets. But what if that role and its growth have been largely overstated?
TOPICS: Bond FundBondsFinancial MarketsFinancial StabilityFund RegulationMutual Fund
Matching Models to Reality: Doomsayers Are Disappointed—Again—as Funds Weather Brexit Shock
By Paul Schott Stevens
July 13, 2016
On Thursday, June 23, the electorate of the United Kingdom voted in a referendum on the country’s membership in the European Union. The result—51.9 percent in favor of “Brexit,” 48.1 percent in favor of “Remain”—went against pollsters’ and pundits’ expectations and surprised the world.
TOPICS: Bond FundEuropeFinancial MarketsFinancial StabilityFund RegulationICI GlobalInternationalMutual Fund
Building on the Success of the Private-Sector Retirement System Is the Real “Secure Choice”
By David Blass
July 8, 2016
Retirement assets in the United States totaled $24 trillion at the end of 2015, bolstered by investments through employer-sponsored plans and individual retirement accounts (IRAs).
TOPICS: 401(k)Fund RegulationGovernment AffairsMutual FundRetirement Policy
It’s Time: SEC Proposals Show the Need to Reexamine the Role of Fund Boards
By Amy B. R. Lancellotta
July 7, 2016
The proper role for fund independent directors—the role where they are best-positioned to represent shareholder interests—is to oversee the work of fund management. The sharp distinction between directors’ oversight role and management’s on-the-ground, day-to-day responsibilities has been a major factor in the modern fund industry’s 75-plus years of success.
When Investor Protection Becomes Protectionism
By Patrice Bergé-Vincent
June 14, 2016
Today, Europe is facing two related needs: to provide its citizens with efficient, lower-cost vehicles for savings and investment, and to bolster economic growth.
TOPICS: EuropeFinancial MarketsFund RegulationICI GlobalInternationalMutual FundTaxes
Industry Leaders Address Changing Industry Terrain
By Miriam Bridges
June 3, 2016
Will fund industry leaders need to rethink their traditional operating models? Experts shared their views on this question and others, as well as the opportunities presented by a rapidly changing industry, in a candid discussion on the second day of ICI’s 58th General Membership Meeting, held May 18–20 in Washington, DC.
TOPICS: EventsFund RegulationGMMMutual Fund
The SEC’s Historic Success: Six Key Ingredients
By Paul Schott Stevens
May 20, 2016
This ICI Viewpoints is adapted from ICI President and CEO Paul Schott Stevens’s introduction for SEC Chair Mary Jo White at the 2016 ICI General Membership Meeting on May 20.
More than 80 years have passed since Congress—looking to restore public confidence in markets at the height of the Great Depression—established the U.S. Securities and Exchange Commission (SEC) to administer the federal securities laws enacted as part of President Franklin D. Roosevelt’s New Deal.
TOPICS: EventsFinancial MarketsFund RegulationGMMMutual Fund
SEC Chair White Expects Continued ‘Bright Spotlight’ on Asset Management
By Rachel McTague
May 20, 2016
The U.S. Securities and Exchange Commission (SEC) is contemplating several new initiatives governing registered funds, in addition to adopting rules this year on reporting modernization, liquidity management, and the use of derivatives, SEC Chair Mary Jo White announced at the opening session on the final day of ICI’s annual General Membership Meeting (GMM).
TOPICS: CybersecurityEventsExchange-Traded FundsFinancial MarketsFinancial StabilityFund RegulationGMMInternationalMutual FundShareholder
To the SEC and FINRA: It’s Your Move
By David W. Blass
April 21, 2016
Earlier this month, I wrote about the wide-ranging benefits of the proposed Securities and Exchange Commission (SEC) rule to give U.S. regulated funds the option of making online access to shareholder reports their default method for informing their shareholders.
TOPICS: Financial MarketsFund RegulationInvestor ResearchMutual FundShareholder
The SEC’s Online-Delivery Gift to Fund Shareholders
By David W. Blass
April 4, 2016
A recent SEC rulemaking proposal presages good news for America’s 90 million mutual fund shareholders. Proposed Rule 30e-3 under the Investment Company Act of 1940, introduced last year as part of a larger initiative to enhance and modernize fund data reporting, would give funds the option of flipping their default mechanism for delivering shareholder reports from U.S. mail to online access.
TOPICS: Financial MarketsFund RegulationInvestor ResearchMutual FundShareholder
Yes, Funds Come and Go—Without Government Help
By Todd Bernhardt
March 11, 2016
For several years now, ICI has pushed back against those advocating for bank-like regulations on the asset management industry, pointing out the numerous reasons why regulated funds or their managers are not sources of risk to the overall financial system.
TOPICS: Financial StabilityFixed IncomeFund RegulationMutual Fund
MetLife Case Shows That “Assuming the Worst of the Worst of the Worst” Doesn’t Work
By Mike McNamee
February 24, 2016
If regulators are going to impose strict rules and heavy burdens on a business, should they have to demonstrate that those rules and burdens address an actual and probable risk?
TOPICS: Bond FundBondsFederal ReserveFinancial StabilityFund RegulationGovernment AffairsMutual Fund
Derivatives—Please Don’t Let Them Be Misunderstood
By Shelly Antoniewicz
February 22, 2016
Derivatives are important portfolio management tools that provide funds with many potential benefits, including the ability to:
- hedge risk;
- enhance liquidity, because derivatives can be more liquid than traditional physical securities;
- gain or reduce exposure to unique markets or to asset classes when access through other instruments is difficult, costly, or impossible;
- manage or equitize cash; and
- reduce cost.
TOPICS: Bond FundBondsEuropeFinancial StabilityFund RegulationInternationalMutual Fund
Liquidity Risk Management Must Be Done Right
By Paul Schott Stevens
January 15, 2016
The following ICI Viewpoints is a lightly edited version of a letter that ICI President and CEO Paul Schott Stevens sent to U.S. Securities and Exchange Commission (SEC) Chair Mary Jo White, as part of the Institute’s overall response to the SEC’s liquidity risk management proposal.
TOPICS: Financial StabilityFund GovernanceFund RegulationInternationalMutual FundOperations and TechnologyShareholderTrading
How the SEC’s Six-Bucket Approach Could Provide a False Picture of Liquidity
By Brian Reid
January 14, 2016
As I explained in a previous post, I filed a letter on January 13 with the U.S. Securities and Exchange Commission (SEC) in response to its liquidity risk management proposal and to Liquidity and Flows of U.S. Mutual Funds, a study by the Commission’s Division of Economic and Risk Analysis (DERA). My letter was one of four components of ICI’s multipart response to the SEC proposal.
TOPICS: Financial StabilityFund GovernanceFund RegulationInternationalMutual FundOperations and TechnologyShareholderTrading
The SEC’s Liquidity Proposal: Good Goals, Unintended Consequences
By Brian Reid
January 13, 2016
On January 13, I filed a letter with the U.S. Securities and Exchange Commission (SEC), in response to the SEC’s liquidity risk management proposal and to Liquidity and Flows of U.S. Mutual Funds, a study by the SEC’s Division of Economic and Risk Analysis (DERA). My letter was one of four components of ICI’s multipart response to the SEC proposal.
TOPICS: Financial StabilityFund GovernanceFund RegulationInternationalMutual FundOperations and TechnologyShareholderTrading
The First Move: MSRB Issues a Proposal for Shortened Settlement Cycle
By Marty Burns
December 8, 2015
Recently, the Municipal Securities Rulemaking Board (MSRB) opened the door on the regulatory filings needed to move the U.S. securities markets to a shortened settlement cycle.
TOPICS: BondsFinancial MarketsFinancial StabilityFund RegulationOperations and Technology
Traders, Start Your Engines: After August 24, Exchanges Need to Coordinate
By Jennifer Choi and George Gilbert
November 30, 2015
The extraordinary volatility in U.S. equity markets on August 24, 2015, exposed a significant deficiency in the rules governing these markets’ structure: a lack of harmonization across securities exchanges for reopening trading after a “limit up–limit down” trading halt in a security.
TOPICS: Equity InvestingEuropeExchange-Traded FundsFinancial MarketsFinancial StabilityFixed IncomeFund Regulation
Mutual Fund Investments in Private Placements: an Overview
By Gregory M. Smith
November 23, 2015
Given recent media interest in mutual fund investments in private placements, it might be helpful to review mutual fund disclosure and valuation obligations. How do funds handle securities that are not publicly traded?
TOPICS: Bond FundEquity InvestingFund GovernanceFund RegulationInvestment EducationMutual FundOperations and TechnologyTrading
U.S. Bond ETFs Resilient on August 24
By Shelly Antoniewicz
November 20, 2015
Some observers have suggested that equity market volatility on August 24, 2015, spilled over into other markets and products, in particular to bond exchange-traded funds (see, for example, Bank of England Financial Stability Paper, no. 34, October 2015, pages 26 and 27). In our analysis of the events of that morning, we conclude that U.S. bond ETFs were resilient and largely immune to the turmoil in the equity markets.
TOPICS: Bond FundBondsEquity InvestingEuropeExchange-Traded FundsFinancial MarketsFinancial StabilityFixed IncomeFund Regulation
Retirement Planning: No Place for Fairy Tales
By Paul Schott Stevens
November 17, 2015
It is sadly appropriate that Labor Secretary Thomas Perez invokes fairy tales in his Nov. 16 commentary, “A path forward for state retirement plans.” Neither his version of the past nor his program for the future accord with reality.
TOPICS: 401(k)Fund RegulationGovernment AffairsMutual FundRetirement Policy
Changes to Money Market Funds Are Showing Up in Data
By Sean Collins
November 10, 2015
In July 2014, the Securities and Exchange Commission (SEC) adopted new regulations for money market funds.
The Wall Street Journal’s Dangerous Disservice to Investors
By Mike McNamee
September 22, 2015
For 75 years, mutual funds have successfully met their regulatory obligation to fulfill redemption requests within seven days, meeting investor demands and delivering on their investment objectives through good markets and bad.
Yet the Wall Street Journal seems determined to ignore this established history and the circumstances surrounding it. It has created a liquidity “measure” of its own devising—a test that no regulator has endorsed and no informed market participant would credit. The newspaper uses its self-invented process to imply that bond mutual funds are “pushing the limits” of Securities and Exchange Commission (SEC) guidelines governing fund liquidity.
TOPICS: Bond FundBondsEquity InvestingExchange-Traded FundsFinancial MarketsFinancial StabilityFixed IncomeFund GovernanceFund RegulationMutual Fund
Ignore the IMF’s Uninformed Call for a Third Round of Reforms to U.S. Money Market Funds
By Jane Heinrichs and Chris Plantier
July 23, 2015
A year ago today, the U.S. Securities and Exchange Commission (SEC) voted to adopt sweeping reforms to its rule governing money market funds.
TOPICS: Financial MarketsFinancial StabilityFund RegulationMoney Market FundsMutual FundTreasury
The IMF on Asset Management: Handle Empirical Results with Care
By Chris Plantier
July 15, 2015
In this ICI Viewpoints series, we’ve examined the wide range of data errors, inconsistencies, results that don’t bear statistical scrutiny, and misinterpretations in the International Monetary Fund’s most recent Global Financial Stability Report (GFSR)—specifically, the chapter on “The Asset Management Industry and Financial Stability.” Those problems primarily involved poor understanding of funds and their investors. We didn’t need advanced statistical methods to uncover them.
TOPICS: EuropeFinancial StabilityFund RegulationICI GlobalInternationalMutual FundTreasury
ICI Welcomes IOSCO’S Call to Focus on Products and Activities in Asset Management
By Paul Schott Stevens
June 17, 2015
ICI President and CEO Paul Schott Stevens today issued the following statement in response to the communiqué released today by the Board of the International Organization of Securities Commissions (IOSCO)
TOPICS: Financial StabilityFund RegulationICI GlobalInternationalMutual Fund
How SIFI Designation Could Undermine Fund Governance: Parsing the Fed’s Proposal for GE Capital
By Paul Schott Stevens
June 16, 2015
Fund boards and independent directors have a long history of serving shareholder interests, yet today they face an alarming prospect that could threaten their ability to continue doing so.
TOPICS: Federal ReserveFinancial StabilityFund GovernanceFund RegulationMutual FundShareholderTreasury
The IMF on Asset Management: Sorting the Retail and Institutional Investor “Herds”
By Sean Collins
June 4, 2015
Part of a series of ICI Viewpoints about problems in the IMF’s analysis of the asset management industry.
In this ICI Viewpoints series, we’re examining the wide range of data errors, inconsistencies, results that don’t bear statistical scrutiny, and misinterpretations in the International Monetary Fund’s April 2015 Global Financial Stability Report (GFSR)—specifically, the chapter on “The Asset Management Industry and Financial Stability.” These problems undercut the IMF’s conclusion that “Even simple investment funds such as mutual funds can pose financial stability risks.”
TOPICS: Bond FundBondsEuropeFinancial StabilityFund RegulationGovernment AffairsICI GlobalInternationalMutual FundPolicy Research
The IMF on Asset Management: Which Herd to Follow?
By Sean Collins
June 1, 2015
Part of a series of ICI Viewpoints about problems in the IMF’s analysis of the asset management industry.
In April 2015, the International Monetary Fund (IMF) published its most recent Global Financial Stability Report (GFSR), which included a chapter titled, “The Asset Management Industry and Financial Stability.”
We have heard suggestions from more than one observer that the IMF’s GFSR Chapter on asset management provides a wealth of charts, tables, and data to support regulators’ case that regulated funds or asset managers could pose systemic risks.
TOPICS: Bond FundBondsEuropeFinancial StabilityFund RegulationGovernment AffairsICI GlobalInternationalMutual FundPolicy Research
Fresh Perspectives on a Changing World
By Miriam Bridges
May 29, 2015
Implications of globalization, the impact of the Millennial Generation on product development, the search for alpha in a world full of passive products—these were among the top priorities and concerns of the fund industry discussed by a panel of industry leaders at ICI’s 57th annual General Membership Meeting (GMM), held May 6–8 in Washington, DC.
TOPICS: CybersecurityFund RegulationGMMICI GlobalMutual FundSavings
The IMF on Asset Management: The Perils of Inexperience
By Sean Collins
May 28, 2015
Part of a series of ICI Viewpoints about problems in the IMF’s analysis of the asset management industry.
In April, the International Monetary Fund (IMF) released its most recent Global Financial Stability Report (GFSR), including a chapter on “The Asset Management Industry and Financial Stability.”
TOPICS: Bond FundBondsEuropeFinancial StabilityFund RegulationGovernment AffairsICI GlobalInternationalMutual FundPolicy Research
SEC Chair White Affirms Agency Has Tools to Address Risks in Industry
By Rachel McTague
May 8, 2015
The U.S. Securities and Exchange Commission (SEC) has the tools it needs to address systemic risks to the extent they exist in the asset management industry, said SEC Chair Mary Jo White at the opening session on the final day of ICI’s annual General Membership Meeting (GMM). White also announced that David Grim—who had been serving as acting director of the SEC’s Division of Investment Management—has just been named director of the division. White said she is thrilled that Grim, a 20-year veteran of the SEC in the investment management area, is taking the reins at a time when the Commission is moving forward to implement proactive regulations for the industry.
TOPICS: BondsCybersecurityEuropeEventsExchange-Traded FundsFederal ReserveFinancial MarketsFinancial StabilityFund RegulationGMMGovernment AffairsInterest RateInternationalMutual FundShareholderTreasury
Opinion: The Tax Threat to Your Mutual Fund
By Mike McNamee
May 7, 2015
Vanguard Chairman and CEO Bill McNabb sent “an open letter to all mutual fund investors” in the opinion pages of Thursday’s Wall Street Journal. His message: fund investors face a clear threat of higher costs, weaker returns, and a bailout tax to salvage other failing financial institutions—all if regulators get their way in imposing new rules on funds or their managers.
TOPICS: 401(k)Federal ReserveFinancial MarketsFinancial StabilityFund RegulationMutual FundRetirement PolicySavingsShareholderTradingTreasury
GMM Policy Forum: “It Always Comes Down to Trust”
By Todd Bernhardt
May 6, 2015
Over the 75-year history of the modern mutual fund industry, funds have helped to democratize investing, providing a tremendous array of investing options at a reasonable cost for millions of people. And given rapid advances in technology and the efficiencies that they can bring, the future looks even brighter, said Walter W. Bettinger II at the opening session of ICI’s 57th General Membership Meeting (GMM).
TOPICS: 401(k)EventsFund RegulationGMMMutual FundShareholder
2015 Investment Company Fact Book: Letter from the Chief Economist
By Brian Reid
May 4, 2015
A version of this letter by ICI Chief Economist Brian Reid was released today in our 55th edition of the Investment Company Fact Book.
This year marks the 75th anniversary of the Investment Company Act and the Investment Advisers Act—the key statutes under which mutual funds, exchange-traded funds (ETFs), closed-end funds, and unit investment trusts are regulated and governed. In 1940—the same year that Congress enacted these laws—the fund industry formed the National Committee of Investment Companies, the trade group that became the Investment Company Institute (ICI).
TOPICS: Financial MarketsFinancial StabilityFund RegulationInvestor ResearchPolicy ResearchRetirement ResearchTrading
The IMF Quietly Changes Its Data, but Not Its Views
By Chris Plantier
April 21, 2015
On Friday, April 10, we pointed out that the International Monetary Fund (IMF) apparently had vastly overstated the size and growth of bond fund holdings of emerging market bonds in its latest Global Financial Stability Report (GFSR).
TOPICS: Bond FundBondsEuropeFinancial StabilityFund RegulationICI GlobalInternationalMutual FundTreasury
Federal Reserve Reverse Repo Facility Helps Stabilize Short-Term Money Markets
By Chris Plantier
April 17, 2015
Following a pattern observed at the end of recent quarters, money market fund holdings of European issuers dropped at the end of March, although the decline was not as large as the previous quarter, ending December 2014. As we have noted before, for regulatory reasons European banks have been paring their balance sheets at the end of each quarter, resulting in a temporary decline in their desire to borrow from money market funds.
TOPICS: BondsEuropeFederal ReserveFinancial MarketsFixed IncomeFund RegulationInvestment EducationMoney Market FundsTreasury
The IMF Is Entitled to Its Opinion, but Not to Its Own Facts
By Sean Collins and Chris Plantier
April 10, 2015
On Wednesday, the International Monetary Fund released its latest Global Financial Stability Report (GFSR), including a chapter on the asset management industry and financial stability.
TOPICS: EuropeFinancial StabilityFund RegulationICI GlobalInternationalMutual FundTreasury
On Fiduciary Rule, New York Times Relies on Fatally Flawed Research
By Paul Schott Stevens
April 8, 2015
Today I submitted the following letter to the editor of the New York Times:
TOPICS: 401(k)Fund RegulationInvestment EducationRetirement PolicySavingsShareholder
Designation’s Vast Reach into Investor Portfolios
By Paul Schott Stevens
March 24, 2015
On Wednesday, March 25, I’ll testify before the Senate Committee on Banking, Housing, and Urban Affairs about the Financial Stability Oversight Council’s process for designating nonbank firms as “systemically important financial institutions,” or SIFIs.
TOPICS: Federal ReserveFinancial MarketsFinancial StabilityFund RegulationGovernment AffairsMutual FundShareholderTreasury
The IMF Makes All of OFR’s Mistakes—And More
By Sean Collins and Chris Plantier
October 10, 2014
The International Monetary Fund (IMF) just released its latest Global Financial Stability Report. In the immortal words of Yogi Berra, it is déjà vu all over again.
The IMF report bears more than a passing resemblance to Asset Management and Financial Stability, published by the U.S. Treasury Department’s Office of Financial Research (OFR) in September 2013. The OFR report was met with widespread criticism for its misinformed discussion of hypothetical “vulnerabilities” posed by mutual funds and other asset managers.
TOPICS: EuropeFinancial StabilityFund RegulationICI GlobalInternationalMutual FundTreasury
Bloomberg Ignores the Evidence on Bond ETFs
By Mike McNamee
September 26, 2014
In response to “Pimco ETF Probe Spotlighting $270 Billion Market Vexing FSB,” we posted the following comment on Bloomberg News’ website:
TOPICS: Bond FundBondsExchange-Traded FundsFederal ReserveFinancial MarketsFinancial StabilityFund RegulationInterest RateInternationalTrading
Why Regulated Funds Are a Relatively Stable Source of Foreign Investment for Emerging Economies
By Chris Plantier
September 26, 2014
The press and policymakers focus a great deal of attention on flows to U.S. and European regulated mutual funds and exchange-traded funds (ETFs), in part because these funds are perhaps the most easily observed and readily measured players in capital markets.
TOPICS: EuropeFinancial MarketsFinancial StabilityFund RegulationICI GlobalInternationalMutual Fund
Securities Lending by Mutual Funds, ETFs, and Closed-End Funds: Are the Risks Systemic?
By Bob Grohowski
September 18, 2014
The Financial Stability Oversight Council (FSOC), the U.S. Treasury’s Office of Financial Research (OFR), and the Financial Stability Board (FSB) are charged with identifying systemic risks.
TOPICS: Federal ReserveFinancial MarketsFinancial StabilityFund RegulationGovernment AffairsMutual FundTreasury
Securities Lending by Mutual Funds, ETFs, and Closed-End Funds: Regulators’ Concerns
By Bob Grohowski
September 17, 2014
This post is the third in a series that focuses on securities lending by U.S. regulated funds—mutual funds, exchange traded funds (ETFs), and closed-end funds that are registered under the Investment Company Act of 1940.
TOPICS: Federal ReserveFinancial MarketsFinancial StabilityFund RegulationGovernment AffairsMutual FundTreasury
Securities Lending by Mutual Funds, ETFs, and Closed-End Funds: The Market
By Bob Grohowski and Sean Collins
September 16, 2014
As the potential risks of securities lending are discussed and debated by the Financial Stability Oversight Council (FSOC), the U.S. Treasury’s Office of Financial Research (OFR), and the Financial Stability Board (FSB), it is important to try to understand both the overall size of the securities lending market and the share of it attributable to different participants.
TOPICS: Federal ReserveFinancial MarketsFinancial StabilityFund RegulationGovernment AffairsMutual FundTreasury
Securities Lending by Mutual Funds, ETFs, and Closed-End Funds: The Basics
By Bob Grohowski
September 15, 2014
The Financial Stability Oversight Council (FSOC) recently announced that it has directed its staff to “undertake a more focused analysis of industry-wide products and activities to assess potential risks associated with the asset management industry.”
TOPICS: Federal ReserveFinancial MarketsFinancial StabilityFund RegulationGovernment AffairsMutual FundTreasury
“Preemptive Runs” and Money Market Fund Gates and Fees: Theory Meets Practice
By Sean Collins and Chris Plantier
August 20, 2014
A recent post on the blog of the Federal Reserve Bank of New York discusses the possibility that new rules by the Securities and Exchange Commission (SEC) allowing money market funds to temporarily impose fees or gates during times of market instability could increase the risk of preemptive runs on such funds during times of stress, rather than helping to limit destabilizing withdrawals, as the SEC intended.
TOPICS: EuropeFederal ReserveFinancial StabilityFund GovernanceFund RegulationGovernment AffairsInternationalMoney Market FundsTreasury
Sizing Up Mutual Fund and ETF Investment in Emerging Markets
By Chris Plantier
August 18, 2014
In coming decades, emerging market (EM) economies will need substantial new capital to accompany and sustain their rapid growth.
TOPICS: Bond FundBondsEquity InvestingEuropeExchange-Traded FundsFinancial MarketsFinancial StabilityFixed IncomeFund RegulationICI GlobalInternationalMutual Fund
Living Wills and an Orderly Resolution Mechanism? A Poor Fit for Mutual Funds and Their Managers
By Frances Stadler and Rachel Graham
August 12, 2014
During the global financial crisis, the distress or disorderly failure of some large, complex, highly leveraged financial institutions (banks, insurance companies, and investment banks) required direct intervention by governments—including a number of bailouts—to stem the damage and prevent it from spreading. One focus of postcrisis reform efforts has been to ensure that regulators are better equipped to “resolve” a failing institution in a way that minimizes risks to the broader financial system, as well as costs to taxpayers. The new tools provided under the Dodd-Frank Act include requirements for the largest bank holding companies and nonbank systemically important financial institutions (SIFIs) to prepare comprehensive resolution plans in advance (known as “living wills”), and creation of a new “orderly resolution” mechanism for financial institutions whose default could threaten financial stability.
TOPICS: Federal ReserveFinancial MarketsFinancial StabilityFund RegulationGovernment AffairsMutual FundShareholderTreasury
Across the Universe: Seeing the Whole Picture in the Systemic Risk Debate
By Paul Schott Stevens
July 30, 2014
Astrophysicists have discovered that they can’t account for the composition and behavior of the universe without including “dark matter”—matter that can’t be observed directly.
TOPICS: Federal ReserveFinancial MarketsFinancial StabilityFund RegulationGovernment AffairsMutual FundShareholderTreasury
The Real Lessons to Be Learned from 1994’s Bond Market
By Brian Reid
July 29, 2014
A recent “Heard on the Street” column in the Wall Street Journal (“Heeding 1994's Bond-Market Lesson,” July 27, 2014) is correct in saying that there’s a lesson to be learned from the 1994 bond market—but it draws the wrong lesson.
TOPICS: Bond FundBondsFederal ReserveFinancial MarketsFinancial StabilityFixed IncomeFund RegulationInterest RateMutual FundRetirement ResearchSavingsTradingTreasury
“The Age of Asset Management”—Less Risk, Not More
By Brian Reid
July 24, 2014
The following was written by ICI’s chief economist, Brian Reid, and published on FT Alphaville on July 23. For more information on ICI’s views and research on financial stability, please visit our Financial Stability Resource Center.
TOPICS: Federal ReserveFinancial MarketsFinancial StabilityFund RegulationGovernment AffairsICI GlobalInternationalMutual FundTreasury
European Banks Significantly Reduced Borrowing from U.S. Money Market Funds in June
By Chris Plantier
July 18, 2014
As we discussed in March and April, European banks have generally become less willing to borrow from U.S. money market funds due to regulatory pressures, especially at the end of the quarter. Specifically, the new Basel III requirements seek to increase capital ratios of banks and explicitly limit how much banks fund their operations through short-term borrowing (which includes short-term securities banks issue that money market funds invest in). This quarter-end effect was particularly strong at the end of June as European bank regulators continued to monitor bank progress toward meeting the new Basel III requirements, which will be fully phased in over the next few years.
TOPICS: BondsEuropeFederal ReserveFinancial MarketsFixed IncomeFund RegulationInvestment EducationMoney Market FundsTreasury
Now Off the Hill, Senator Snowe Still Brimming with Ideas, Advice
By Rob Elson
June 5, 2014
U.S. policy is ripe for reform in a number of key areas, but changes to ease the polarized political environment must come first, former U.S. senator Olympia Snowe (R-ME) told the crowd during the final session of ICI’s 56th annual General Membership Meeting (GMM), held May 20–22 in Washington, DC.
TOPICS: CybersecurityEventsFederal ReserveFinancial MarketsFinancial StabilityFund RegulationGMMGovernment AffairsMutual FundRetirement PolicyShareholderTreasury
Industry Leaders Reflect on Serving Investors in an Evolving World
By Christina Kilroy
June 4, 2014
Speaking on the Leadership Panel held Wednesday, May 21, at ICI’s General Membership Meeting (GMM), fund industry leaders agreed that challenges as well as opportunities abound for their businesses in today’s complex world.
TOPICS: 401(k)EventsFederal ReserveFinancial MarketsFinancial StabilityFund GovernanceFund RegulationGMMGovernment AffairsInvestment EducationMutual FundRetirement PolicyShareholder
Former ICI President Matt Fink Decries FSOC’s “Revisionist History”
By Mike McNamee
May 30, 2014
Arguments that large stock and bond mutual funds are prone to “runs” that can destabilize markets go back many decades, and are as misguided now as they were then, argues Matt Fink, ICI president from 1991 to 2004, and author of The Rise of Mutual Funds: An Insider's View.
TOPICS: Federal ReserveFinancial MarketsFinancial StabilityFund RegulationGovernment AffairsMutual FundTreasury
Errors of the Times: Getting the FSOC Debate All Wrong
By Mike McNamee
May 23, 2014
New York Times columnist Floyd Norris makes a number of fundamental errors in his Friday column about the House Financial Services Committee hearing and the broader debate about the Financial Stability Oversight Council (FSOC) and its review of asset management.
TOPICS: Federal ReserveFinancial MarketsFinancial StabilityFund RegulationGovernment AffairsICI GlobalInternationalMutual FundTreasury
SEC Chair White Stresses Need for FSOC to Consult Sources for Necessary Expertise
By Rachel McTague
May 22, 2014
Securities and Exchange Commission (SEC) Chair Mary Jo White today called for the U.S. Financial Stability Oversight Council (FSOC) to use outside expertise to the degree necessary in its process of designating systemically important financial institutions (SIFIs). She asserted that it is “enormously important for FSOC, before it makes any decision of any kind, to make sure it has the necessary expertise on any of those issues.”
TOPICS: EventsFederal ReserveFinancial MarketsFinancial StabilityFund GovernanceFund RegulationGMMGovernment AffairsMoney Market FundsMutual FundOperations and TechnologyShareholderTradingTreasury
Headlining ICI’s GMM, Blair Talks of Tough Challenges, Vast Opportunities
By Rob Elson
May 21, 2014
Challenges abound in our increasingly global world, said Tony Blair, former prime minister of the United Kingdom. Yet our future could be brighter than ever, he insisted.
Blair’s stirring words came during a keynote speech at ICI’s 56th General Membership Meeting (GMM). After his opening remarks, Blair sat down with ICI Chairman Bill McNabb, Chairman and CEO of The Vanguard Group, to discuss a range of issues. The session headlined the three-day meeting, which began yesterday in Washington, DC.
TOPICS: 401(k)EventsFinancial MarketsFund RegulationGMMInternationalMutual Fund
GMM Policy Forum: BlackRock’s Larry Fink Speaks with ICI’s Paul Stevens
By Todd Bernhardt
May 21, 2014
The fund industry needs to stop focusing on the moment and start focusing on outcomes when advising investors on their resources, said Laurence D. Fink, chairman and CEO of BlackRock, at ICI’s Annual Policy Forum, part of the Institute’s 56th General Membership Meeting (GMM).
TOPICS: 401(k)BondsEventsFinancial MarketsFund RegulationGMMInternationalInvestment EducationMutual FundRetirement PolicySavingsShareholderTreasury
“Market Tantrums” and Mutual Funds: A Second Look
By Sean Collins and Chris Plantier
May 19, 2014
Over the past year, policymakers who are focused on financial stability have pursued a theory that mutual fund investors can destabilize financial markets by redeeming from funds when markets decline. According to this theory, redemptions by fund investors lead fund managers to sell securities; those sales drive asset prices down further and, in turn, spur more investor flight, redemptions, and price declines.
TOPICS: Bond FundBondsFinancial MarketsFinancial StabilityFixed IncomeFund RegulationInterest RateInvestor ResearchMutual FundTradingTreasury
For Concerns About Risk, a Better Way Forward
By Mike McNamee
May 16, 2014
Since the financial crisis, regulators in the United States and abroad have been looking for ways to prevent a repeat. But recently it seems they’ve gone off course.
TOPICS: Financial MarketsFinancial StabilityFund RegulationGovernment AffairsICI GlobalInternationalMutual FundTreasury
Overseas Overreach
By Mike McNamee
May 15, 2014
The Financial Stability Board (FSB)—composed of financial regulators and central bankers from around the globe—is proposing a flawed methodology that inappropriately puts regulated U.S. funds under scrutiny for possible designation as global systemically important financial institutions—or G-SIFIs.
TOPICS: Financial MarketsFinancial StabilityFund RegulationGovernment AffairsICI GlobalInternationalMutual FundTreasury
How SIFI Designation Could Lead to a New Taxpayer Bailout
By Mike McNamee
May 14, 2014
We have spent the past several days discussing why efforts by international and domestic regulators to examine mutual funds as sources of systemic risk are unnecessary and inappropriate.
TOPICS: Financial MarketsFinancial StabilityFund RegulationGovernment AffairsMutual FundTreasury
Who Are the FSB 14?
By Mike McNamee
May 13, 2014
In their search for ways that investment funds can pose risks to the financial system, regulators and central bankers from around the globe have proposed an arbitrary threshold: any investment fund with assets of more than $100 billion should automatically be subjected to further examination and consideration as a possible “global systemically important financial institution,” or G-SIFI.
TOPICS: Financial MarketsFinancial StabilityFund RegulationGovernment AffairsICI GlobalInternationalMutual FundTreasury
The Market Crash That Never Came
By Mike McNamee
May 12, 2014
U.S. and international banking regulators, in their search for ways that mutual funds and their managers could threaten financial stability, have come up with a simple story: fund investors and asset managers “crowd or ‘herd’ into popular asset classes or securities” and thus “magnify market volatility.”
TOPICS: Federal ReserveFinancial MarketsFinancial StabilityFund RegulationGovernment AffairsICI GlobalInternationalMutual FundTreasury
Size by Itself Doesn’t Matter—Leverage Does
By Mike McNamee
May 9, 2014
Second in a series of Viewpoints postings on funds and financial stability.
The threshold set by the Financial Stability Board (FSB) for examining whether a regulated fund could pose risk to the financial system should be redrawn—or better yet, withdrawn.
TOPICS: Federal ReserveFinancial MarketsFinancial StabilityFund RegulationGovernment AffairsICI GlobalInternationalMutual FundTreasury
SIFI Designation for Funds: Unnecessary and Harmful
By Mike McNamee
May 8, 2014
U.S. and international regulators are examining whether asset managers or the investment funds that they offer could be sources of risk to the overall financial system and should thus be designated as systemically important financial institutions (SIFIs).
TOPICS: Federal ReserveFinancial MarketsFinancial StabilityFund RegulationGovernment AffairsICI GlobalInternationalMutual FundTreasury
ICYMI: "The Feds Target Money Managers"
By Mike McNamee
May 7, 2014
Yesterday’s editorial in the Wall Street Journal, “The Feds Target Money Managers,” neatly summed up the case against treating asset managers as systemically important financial institutions (SIFIs) and subjecting them to bank-style regulation.
TOPICS: Federal ReserveFinancial MarketsFinancial StabilityFund RegulationGovernment AffairsICI GlobalInternationalMutual FundTreasury
ICYMI: Congress Asks Questions About SIFI Designation and Asset Managers; SEC Chair White Provides Telling Answers
By Mike McNamee
April 30, 2014
DC scene setter, 2013–2014: The Financial Stability Oversight Council (FSOC) is examining asset managers for possible “systemically important financial institution” (SIFI) designation, which would bring with it enhanced prudential regulation from the Federal Reserve. Such “bank-style” regulation is foreign to U.S. capital markets.
TOPICS: Federal ReserveFinancial MarketsFinancial StabilityFund RegulationGovernment AffairsICI GlobalInternationalMutual FundTreasury
ICI Statement: FSOC Seeking “Pretexts” to Designate Funds
By Mike McNamee
April 24, 2014
ICI President and CEO Paul Schott Stevens today made the following statement in response to media reports that the Financial Stability Oversight Council (FSOC) has stepped up its review of major asset managers—which could lead to their designation as “systemically important financial institutions,” or SIFIs—based on boilerplate metrics.
TOPICS: Federal ReserveFinancial MarketsFinancial StabilityFund RegulationGovernment AffairsICI GlobalInternationalMutual FundTreasury
Seasonality, U.S. Money Market Funds, and the Borrower of Last Resort
By Chris Plantier
April 16, 2014
The March money market fund holdings data indicate a large drop in the share of fund assets allocated to European counterparties and a large increase in the share of fund assets allocated to U.S. counterparties. This shift is likely temporary and reflects reduced willingness of European banks to borrow from money market funds at the end of the quarter, rather than reduced demand from money market funds. Also, the increase in lending to U.S. counterparties is almost entirely due to the large increase in money market fund lending to the Federal Reserve via its overnight reverse-repo (repurchase agreement) facility.
TOPICS: BondsEuropeFederal ReserveFinancial MarketsFixed IncomeFund RegulationInvestment EducationMoney Market FundsTreasury
ICI Responds to the FSB Consultation on Systemic Risk and Investment Funds
April 8, 2014
In early January, the Financial Stability Board (FSB)—an international group of financial authorities—published a consultation paper on the issue of systemic risk and investment funds.
TOPICS: Federal ReserveFinancial MarketsFinancial StabilityFund RegulationGovernment AffairsICI GlobalInternationalMutual FundTreasury
ICI Response to Bank of England Haldane Speech on Asset Management and Potential Risk
By Mike McNamee
April 4, 2014
Today, ICI President and CEO Paul Schott Stevens made the following comment in response to a speech by Andy Haldane, currently executive director of the Bank of England and slated to become its chief economist in June.
TOPICS: Federal ReserveFinancial MarketsFinancial StabilityFund RegulationGovernment AffairsICI GlobalInternationalMutual FundTreasury
U.S. Prime Money Market Funds and European Borrowing
By Chris Plantier
March 18, 2014
European holdings by U.S. prime money market funds have fluctuated significantly since early 2011.
TOPICS: BondsFederal ReserveFinancial MarketsFixed IncomeFund RegulationInvestment EducationMoney Market FundsTreasury
Why Asset Management Is Not a Source of Systemic Risk
By Paul Schott Stevens
March 17, 2014
This Viewpoints post is a summary of a speech given by ICI President and CEO Paul Schott Stevens at the Mutual Funds and Investment Management Conference. The entire speech is now available.
Since September, U.S. and international regulators have released reports suggesting that asset managers or the funds that they offer may be sources of risk to the overall financial system. ICI does not agree that the asset management sector poses systemic risk. Nonetheless, these reports could be the predicate for new, bank-style prudential regulation of the asset management industry—which could significantly harm funds and the investors who use them.
TOPICS: Federal ReserveFinancial MarketsFinancial StabilityFund RegulationGovernment AffairsICI GlobalInternationalMutual FundTreasury
Money Market Funds and Liquidity Ratios: Why So High and Stable?
By Chris Plantier
February 19, 2014
Second in a series of posts about ICI’s new data release, a monthly compilation and summary of portfolio data from taxable money market funds. To find out more, read the first post about the new data summary or this list of answers to frequently asked questions.
The SEC’s 2010 money market fund reforms require taxable funds to hold at least 30 percent of their assets in securities that are deemed to be liquid within five business days (known as weekly liquidity) and at least 10 percent of their assets in securities that are deemed to be liquid in one business day (known as daily liquidity). In practice, money market funds—especially government money market funds—hold liquidity well above these minimum standards, and these ratios change very little in any given month.
TOPICS: BondsFederal ReserveFinancial MarketsFixed IncomeFund RegulationInvestment EducationMoney Market FundsTreasury
Updated FICCA Framework Makes Auditing Omnibus Accounts Easier, More Efficient
By Kathy Joaquin
January 27, 2014
Many financial intermediaries—such as broker-dealers, financial advisers, and retirement plan recordkeepers—provide services to fund shareholders and maintain customer account information on their own recordkeeping systems. Fund sponsors, in turn, want to ensure that intermediaries are meeting their obligations in servicing fund shareholders, and so, have been seeking oversight tools that allow them to do this efficiently and effectively. ICI recently took steps to improve one of the critical oversight tools available to the industry, through a major update of the Financial Intermediary Controls and Compliance Assessment (FICCA) engagement framework.
TOPICS: Fund GovernanceFund RegulationMutual FundOperations and Technology
ICI’s New Data Release: Further Enhancing the Transparency of Money Market Funds
By Chris Plantier
January 21, 2014
The 2010 reforms to money market mutual funds greatly enhanced the transparency of these funds, giving regulators, analysts, and investors greater insight into important elements of funds’ holdings and operations.
The reforms required funds to disclose their entire portfolio holdings to the public on their company websites five business days after the end of each month. Money market funds also are required to file a more detailed disclosure—SEC Form N-MFP—with the Securities and Exchange Commission directly. The SEC releases this more detailed data to the public 60 days after it’s filed. The SEC does not, however, summarize the data, leaving the public with no non-commercial access to a broad look at holdings across the industry.
TOPICS: BondsFederal ReserveFinancial MarketsFixed IncomeFund RegulationInvestment EducationMoney Market FundsTreasury
Column Makes the Same Mistakes as OFR
By Paul Schott Stevens
January 20, 2014
In recent months, both the U.S. Treasury Department's Office of Financial Research (OFR) and international regulators such as the Financial Stability Board (FSB) have examined whether asset managers pose risks to financial stability. One report is deeply flawed; the other offers a more informed view. Unfortunately, Gretchen Morgenson’s New York Times column (“Bailout Risk, Far Beyond the Banks,” January 12) veers toward the flawed report.
TOPICS: Federal ReserveFinancial MarketsFinancial StabilityFund RegulationGovernment AffairsICI GlobalInternationalTreasury
‘Sponsor Support’ for Money Market Funds Is Old—and Overblown—News
By Mike McNamee
October 21, 2013
A story in the October 21 issue of the Financial Times (“Almost 20 money market funds bailed out”; subscription required) takes old numbers and tries to present them as news.
Check the Facts: Funds Engage Actively on Corporate Governance
By Ianthé Zabel
July 19, 2013
ICI president and CEO Paul Schott Stevens recently sent the following letter to the New York Times:
Every mutual fund or other registered investment company is required by law to cast votes on proxy proposals in the interests of the fund and its investors. Generally, funds interpret this to mean that they should support proposals that will promote good corporate governance and increase the value of the funds’ investments, carefully weighing shareholder interests and fund objectives.
TOPICS: Fund Regulation
Key Points to Remember on Fund Fees
By Sean Collins and Bob Grohowski
July 12, 2013
Over the past two decades, investors have paid less and less to own shares of mutual funds.
TOPICS: 401(k)Fund RegulationInvestment Education
Eliminating Confusion in MSRB Rulemaking
By Tamara Salmon
March 8, 2013
The Municipal Securities Rulemaking Board (MSRB) has asked for input on how it can improve its approach to rulemaking. We’ve responded with several recommendations for the agency, including steps that would eliminate confusion relating to the regulation of 529 college savings plans.
TOPICS: Fund Regulation
One Size Does Not Fit All in Regulation of Financial Benchmarks
By Robert C. Grohowski, Mara Shreck, and Giles Swan
March 1, 2013
Following controversy surrounding calculation of the London Interbank Offered Rate (LIBOR), international regulators are closely scrutinizing the methodology, use, and oversight—among other issues—of financial benchmarks.
TOPICS: Fund Regulation
Securities Lending and Repos: FSB Intrudes on Areas Best Left to National Regulators, Market Forces
By Robert C. Grohowski and Giles Swan
January 17, 2013
The Financial Stability Board (FSB), the international body established by the G20 to promote coordination among authorities responsible for financial stability, has made a number of recommendations toward creating a global policy framework for the securities lending and repurchase agreement (repo) markets.
TOPICS: Fund RegulationICI Global
Sticking to the Facts of Money Market Fund Regulation
By Dan Waters
October 25, 2012
In a recent column, the Evening Standard’s Anthony Hilton includes money market funds as part of a network he suggests forms “an unregulated zone” with “no oversight.”
The Facts and Principles That Must Guide Money Market Fund Reform
By Dan Waters
October 3, 2012
In Madrid this week, the board of the International Organization of Securities Commissions will choose their course of action on money market funds.
TOPICS: Fund RegulationICI GlobalMoney Market Funds
ICI Responds to Geithner Letter to FSOC on Money Market Funds
By Ianthe Zabel
September 27, 2012
Today, ICI President and CEO Paul Schott Stevens made the following comment in response to a letter from U.S. Treasury Secretary Timothy Geithner to the members of the Financial Stability Oversight Council about proposed money market fund regulations.
TOPICS: Fund RegulationMoney Market Funds
Ensuring Effective and Reasonable Data Collection on 529 Plans
By Tamara K. Salmon
September 17, 2012
The Municipal Securities Rulemaking Board (MSRB) has proposed a regulation that would increase the amount of information it collects on 529 educational savings plans. ICI supports the MSRB’s goal of having the information it needs to carry out its oversight responsibilities. However, we have serious concerns about this particular proposal. The MSRB must strike a careful balance to ensure that it receives meaningful information without imposing unreasonable requirements on those complying with the rules. We’ve recently expressed this view, along with several recommendations for the proposal, in a letter to the MSRB.
TOPICS: Fund Regulation
Creating Derivatives Rules That Work Globally
By Jennifer S. Choi and Giles Swan
September 5, 2012
Derivatives—which include instruments such as options, futures, and swaps—are important portfolio management tools for funds worldwide, providing options and flexibility to fund managers as they carry out investment strategies and manage risks.
TOPICS: Fund Regulation
JOBS Act Proposal Fails on Investor Protection
By Paul Schott Stevens
August 29, 2012
Today, the Securities and Exchange Commission (SEC) issued a proposal to implement an important part of the Jumpstart Our Business Startups Act, or JOBS Act.
TOPICS: Fund Regulation
Better Disclosure: Distinguishing 529 Plans from Traditional Municipal Bond Offerings
By Tamara K. Salmon
August 8, 2012
The fund industry strongly supports effective public disclosure to ensure that retail and institutional investors can get the information they need to make sound investments. For disclosure to be effective, however, it has to align with marketplace realities.
TOPICS: Fund Regulation
New York Times Trips into the “Money Market Funds Are Banks” Trap
By Karrie McMillan
July 6, 2012
Floyd Norris’ column, “Money Market Funds and Their Allies Resist New Rules,” falls into the trap of concluding that money market mutual funds are banks. They’re not.
TOPICS: Fund RegulationMoney Market Funds
UCITS V—Significant Changes for European Funds and Fund Managers
By Giles Swan
July 3, 2012
Today the European Commission adopted a proposal for revisions to the Undertakings for Collective Investment in Transferable Securities (UCITS) framework, which governs cross-border retail investment funds in Europe.
TOPICS: Fund RegulationICI GlobalInternational
Money Market Fund Redemption Restrictions Would Drive Investors and Intermediaries Away from Money Market Funds
By Kathleen Joaquin
June 21, 2012
If you’re like most investors, money market funds mean stability, liquidity, and convenience.
Yet, some of these hallmark features could become a thing of the past if the Securities and Exchange Commission (SEC) imposes redemption restrictions on money market funds.
How would these redemption restrictions work?
The SEC’s contemplated redemption restrictions would essentially deny investors full use of their cash by escrowing a portion of a shareholder’s money market fund account on an ongoing basis. In the unlikely event that the fund breaks the dollar, the restricted shares would then be used to absorb first losses.
TOPICS: Fund RegulationMoney Market FundsOperations and Technology
Forcing Money Market Funds to “Float”: Hurting Investors, Increasing Risk
Paul Schott Stevens
June 11, 2012
It’s rare to see the Wall Street Journal editorializing in favor of regulation for regulation’s sake.
TOPICS: Financial MarketsFund RegulationMoney Market Funds
The SEC Should Protect All Investors from Misleading Hedge Fund Ads
By Robert C. Grohowski
May 31, 2012
In early April, President Obama signed the Jumpstart Our Business Startups Act, or JOBS Act, into law. Most of the JOBS Act has little to do with the fund industry, but one provision—the repeal of a long-standing ban on advertising private securities offerings—has the potential to open the door to misleading ads for private funds, such as hedge funds. To be clear, these won’t be mutual fund advertisements; nonetheless, we are concerned that misleading ads for any fund will harm investors, cause confusion, and damage the reputation of all funds in the marketplace.
TOPICS: Fund Regulation
Rulemaking Must Reflect Realities of Funds’ Access to Shareholder Information
By Kathleen Joaquin and Tamara K. Salmon
April 30, 2012
We are seeing a troubling development in Washington. In high-profile areas such as money market funds and anti–money laundering measures, regulators continue to pursue rules premised on the notion that mutual funds know or can obtain detailed information on each of their underlying shareholders.
TOPICS: Fund RegulationMoney Market FundsOperations and Technology
Allegations Made in Indiana University Study Are Speculative and Dubious
By Robert C. Grohowski
April 27, 2012
Thanks to mutual funds’ structure and regulation, fund investors enjoy a number of protections. One among them is that advisers to funds, as well as directors on fund boards, have fiduciary duties. This means they have a fundamental, legal obligation to act in the best interests of the fund—and its shareholders—with undivided loyalty and utmost good faith.
TOPICS: Fund Regulation
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.
TOPICS: Fund Regulation
What Happens If ‘Floating’ Funds Don’t Float?
By Jane Heinrichs and Greg Smith
March 29, 2012
Some recent coverage—including the CFOJournal blog of the Wall Street Journal—suggests that worries about the impact on investors of forcing money market funds to float their net asset value (NAV) may be overblown. The story goes like this: the mark-to-market prices of money market funds, and the experience of a few money market funds that already operate with a floating NAV, show that fluctuations in the “floating” value would be minuscule—rarely large enough to change the penny-rounded per-share price of the fund. So if floating funds don’t float, what’s the harm?
Money Market Funds: Let’s Stick to the Facts
By: Brian Reid
March 6, 2012
As a banking regulator who was in office during the worst banking crisis since the Great Depression, Sheila Bair knows that banks and money market funds are not the same. Yet in her recent Huffington Post piece, Bair blurs vital distinctions in an effort to convince the reader that money market funds are in fact extremely risky banks—and thus need a stiff dose of banking regulation.
TOPICS: Fund RegulationMoney Market Funds
CFTC Decision Imposes Inconsistent Requirements on Funds, Hurts Shareholders
By: Karrie McMillan
March 5, 2012
The Commodity Futures Trading Commission (CFTC) recently finalized a rule—known as Rule 4.5—that will require many advisers to mutual funds that invest in commodity futures, commodity options, and swaps to register with the agency. This development is deeply troubling for at least two reasons:
- It will impose duplicative and fundamentally inconsistent requirements on these funds.
- Shareholders will pay the ultimate price for this rule in the way of increased fees and fewer investment options.
TOPICS: Commodity InvestmentsFund Regulation
The Honest Truth About Forcing Money Market Funds to Float
By Brian Reid
February 29, 2012
Advocates for further regulation of money market funds string together a loose chain of arguments to create the impression that money market funds are bank products, rather than investment securities. From this, they conclude that these funds need bank-like regulation. Sallie Krawcheck’s commentary in today’s Wall Street Journal is the latest effort in this campaign.
The ‘Hue and Cry’ over Money Market Funds Is a Chorus of Many Voices
By Paul Schott Stevens
February 24, 2012
Securities and Exchange Commission Chairman Mary Schapiro took aim at money market funds again today, this time lamenting “the hue and cry being raised by the industry” against the proposals that she champions.
TOPICS: Fund RegulationMoney Market Funds
Proposal to Implement the Volcker Rule Raises Deep Concerns for U.S. Registered Funds
By Paul Schott Stevens
February 14, 2012
Congress enacted the provision of the Dodd-Frank Act known as the Volcker Rule to restrict banks from using their own resources to trade for purposes unrelated to serving clients—something known as “proprietary trading.”
TOPICS: Exchange-Traded FundsFinancial MarketsFund Regulation
Proposal to Implement Volcker Rule Raises Significant Issues for Regulated Funds Globally
By Dan Waters
February 14, 2012
Congress enacted the provision of the Dodd-Frank Reform Act known as the Volcker Rule to restrict banks from sponsoring and investing in hedge funds (so-called covered funds) and using their own resources to trade for purposes unrelated to serving clients—something known as “proprietary trading.”
A Bad Diagnosis Could Be Fatal for Money Market Funds
By Paul Schott Stevens
February 13, 2012
Bad diagnosis leads to bad prescriptions—and the errors can be fatal. The Wall Street Journal’s lead editorial today, “Money Fund Make-Over,” falls into that trap.
The Rx of this editorial is premised on the notion that money market fund investors don’t understand that they’re just that—investors. Yet every fund’s prospectus provides a clear description of all risks and rewards associated with the fund. No fund offers any expectation of an explicit or implicit guarantee by the fund sponsor or the U.S. government. That message is repeated in virtually every communication from money market funds to investors.
TOPICS: Fund RegulationMoney Market Funds
Amended CFTC Rule 4.5 Appears to Impose Unnecessary Burdens on Many Mutual Fund Advisers
By: Rachel McTague
February 10, 2012
On February 8, the Commodity Futures Trading Commission (CFTC) issued amended Rule 4.5, a regulation governing commodity pool operators (CPOs), as well as a related rule proposal. Among other changes, the amendments to the rule significantly narrow the ability of registered investment advisers to rely on the rule’s exclusion from regulation as a CPO. As a result, many advisers will be required to register with the CFTC even though they are already regulated by the Securities and Exchange Commission (SEC).
TOPICS: Commodity InvestmentsFund Regulation
The SEC’s Money Market Fund Plans—Scoring a Hat Trick Against Investors and the Economy
By Paul Schott Stevens
February 7, 2012
The Wall Street Journal reports today that the Securities and Exchange Commission (SEC) continues to pursue regulatory changes for money market funds that will harm investors, damage financing for businesses and state and local governments, and jeopardize a still-fragile economic recovery. Quite a regulatory hat trick.
Fund Investment in Commodities Provides Opportunity and Diversification for Investors
By Karen Lau Gibian and Rachel H. Graham
January 26, 2012
On Capitol Hill, a hearing at the Permanent Subcommittee on Investigations (PSI) raises questions about mutual fund investors’ ability to get commodity exposure in their portfolios and suggests the Internal Revenue Service (IRS) should no longer allow this type of investment.
TOPICS: Commodity InvestmentsFinancial MarketsFund RegulationTaxes
ICI Registers Deep Concerns with the Volcker Rule Proposal
By Rachel H. Graham
January 18, 2012
The “Volcker Rule” provision in the Dodd-Frank Wall Street Reform and Consumer Protection Act was written to restrict banks from using their own resources to trade for purposes unrelated to serving clients. While the Volcker Rule was not directed at U.S. mutual funds and other registered investment companies, its proposed implementation raises deep concerns for the U.S. registered fund industry.
TOPICS: Financial MarketsFund Regulation
Volcker Rule Implementation Threatens Global Investment Funds and Their Shareholders
By Dan Waters
January 18, 2012
The proposed implementation of the so-called Volcker Rule has serious implications for global investment funds and their shareholders. Like our U.S.-based ICI colleagues, ICI Global has today voiced concerns about this rule in a statement to the U.S. House subcommittees examining how the rule will impact markets and investors.
TOPICS: Financial MarketsFund Regulation
PCAOB Must Demonstrate Need for Mandatory Audit Firm Rotation
By Amy Lancellotta and Gregory Smith
December 22, 2011
The Independent Directors Council (IDC) and the Investment Company Institute (ICI) oppose requiring a mandatory rotation of audit firms as detailed in a concept release from the Public Company Accounting Oversight Board (PCAOB).
TOPICS: Fund RegulationOperations and Technology
Time to Stamp Out the Confusion Around ‘Shadow Banking’
By Brian Reid
December 6, 2011
In the United States, money market funds are governed by tight risk-limiting rules, rules that have become considerably tighter since 2008. The Securities and Exchange Commission (SEC) has indicated further changes are forthcoming.
Yet some recent commentary and reporting on money market funds misses this fact, substituting instead the vague notion that these funds lurk in a seemingly unregulated world of “shadow banking,” an epithet used to debase a large group of nonbank financial intermediaries and activities. A recent Wall Street Journal column, for example, characterized money market funds as “one of the riskiest participants in shadow banking.” Last May, a Reuters story described shadow banking as “a network of loosely regulated private equity, hedge, and money funds that together are large enough to topple the global financial system.”
TOPICS: Financial MarketsFund RegulationMoney Market Funds
A Thoughtful Approach to Regulating Derivatives and Protecting Investors
Robert C. Grohowski
November 8, 2011
A Thoughtful Approach to Regulating Derivatives and Protecting Investors
TOPICS: Fund Regulation
Washington Post Columnist Ignores Regulation, Transparency of Funds
By Paul Schott Stevens
November 7, 2011
Today I submitted the following letter to the editor of the Washington Post: Mutual funds are among the most regulated and transparent investment vehicles available, with investor protection as a defining principle. In his Sunday column, Steven Pearlstein chose to ignore that record.
TOPICS: Financial MarketsFund Regulation
ICI Responds to Hearing on Excessive Speculation
By Stephanie Ortbals-Tibbs
November 3, 2011
ICI issued the following statement in response to today’s hearing, “Excessive Speculation and Compliance with the Dodd-Frank Act,” before the Senate’s Permanent Subcommittee on Investigations.
TOPICS: Commodity InvestmentsExchange-Traded FundsFinancial MarketsFund Regulation
The Volcker Illusion: Why Bank Regulation Won't Work for Money Market Funds
By Paul Schott Stevens
October 24, 2011
The Volcker Illusion: Why Bank Regulation Won't Work for Money Market Funds
ICI Responds to Hearing on Exchange-Traded Funds
By Stephanie Ortbals-Tibbs
October 19, 2011
ICI issued the following statement in response to today’s hearing in the Senate Banking Subcommittee on Securities, Insurance, and Investment, “Market Microstructure: Examination of Exchange-Traded Funds.”
TOPICS: Exchange-Traded FundsFinancial MarketsFund Regulation
The Facts Missing From a Wall Street Journal Column on Money Market Funds
By Mike McNamee
October 18, 2011
Misinformation lurks in a recent column from Wall Street Journal Money & Investing editor Francesco Guerrera, “Hidden Dangers Lurking in Money Market Funds.” Given the vital role that money market funds play in our economy, regulators and investors alike need the best information possible on this topic. So let’s correct the record with a few key facts.
TOPICS: Fund RegulationMoney Market Funds
A Win for Both Fund Advisers and the SEC
By Tami Salmon
September 28, 2011
In October 2010, ICI began to work with staff at the Securities and Exchange Commission (SEC) to obtain no-action relief from a recordkeeping requirement of the “pay-to-play” rule, which the SEC adopted in July 2010. SEC staff recently granted that no-action relief, a positive development both for advisers to mutual funds and the SEC’s staff.
TOPICS: Fund Regulation
Commentary: Court Strikes Down SEC’s Proxy Access Rule
By Dorothy A. Berry
September 14, 2011
On July 22, the United States Court of Appeals for the District of Columbia Circuit vacated the proxy access rule adopted by the Securities and Exchange Commission (SEC) last year. The court found that the SEC had failed to adequately assess the economic effects of the rule and noted in particularly harsh terms the SEC’s failure to adequately address the rule’s impact on investment companies. The case was brought by the Business Roundtable and the U.S. Chamber of Commerce, and IDC filed an amicus brief jointly with ICI in support of their petition to vacate the rule as applied to investment companies. We’re pleased with the result but disappointed that it took a litigated action to get here.
TOPICS: Fund Regulation
The Uphill Path to Better Economic Analysis in Rulemaking
By Paul Schott Stevens
August 10, 2011
Last month, the United States Court of Appeals for the District of Columbia Circuit vacated the Securities and Exchange Commission’s rule on proxy access. The unanimous ruling marked the fifth time since 2005 that the DC Circuit has struck down an SEC rule, and the third decision based on the agency’s failure to properly weigh economic consequences and to consider—as the law requires—the effects of its rules on efficiency, competition, and capital formation.
TOPICS: Commodity InvestmentsFund Regulation
The Lingering Threat of Floating NAVs
By Mike McNamee
August 5, 2011
Despite widespread opposition from dozens of business, municipal, and investors groups, regulators continue to ponder the question of whether money market funds should be required to abandon the stable $1.00 net asset value (NAV) in favor of a floating NAV.
In Case You Missed It: Coverage of House Financial Services Committee Hearing on Funds
By Ianthé Zabel
June 28, 2011
The future of money market funds, how to define “systemic risk” to the financial system, and fiduciary standards for retirement plans were among the topics discussed at a hearing last week before the House Financial Services Subcommittee on Capital Markets and Government Sponsored Enterprises. ICI President Paul Schott Stevens testified at the hearing, along with representatives from ICI member firms Fidelity Management & Research Company and the Vanguard Group.
TOPICS: Fund RegulationGovernment Affairs
Take One Idea Off the Table: Forcing Money Market Funds to Float
By Mike McNamee
June 3, 2011
The Investment Company Institute would like to thank the Wall Street Journal for its balanced approach in analyzing the debate over money market fund regulation—providing countervailing views from Yale University Professor Jonathan Macey and Columbia Law School Professor Jeffery Gordon about how to make money market funds even more resilient in the face of the next financial crisis.
TOPICS: Fund Regulation
Money Market Funds: Four Key Points
By Mike McNamee
May 10, 2011
Later today, the Securities and Exchange Commission will hold a roundtable on money market funds and systemic risk. ICI Chief Economist Brian Reid will be one of the panelists at the roundtable, which should be an interesting discussion. Ahead of that discussion, here are four key points worth keeping in mind.
Wall Street Journal Editorial Ignores “Economic Disruption” of Floating the Value of Money Market Funds
By Ianthe Zabel
May 9, 2011
The Wall Street Journal’s lead editorial today used a flawed analysis to mischaracterize money market funds and the recent efforts to make them more resilient in extreme market conditions. ICI President and CEO Paul Schott Stevens has submitted a letter to the editor in print and online to respond.
TOPICS: Fund RegulationMoney Market Funds
Coping in the Expanding World of Compliance
By Karrie McMillan
May 5, 2011
Compliance officers play a special role in the fund industry. In a nutshell, their job is to make sure the rules are followed—and thus to help maintain the industry’s fiduciary culture and the investor trust that it fosters.
TOPICS: EventsFund Regulation
Wall Street Journal Falls Short with Story on Funds’ Commodity Investments
By Ianthe Zabel
April 26, 2011
Today’s Wall Street Journal included an article that attempted to analyze the debate over regulation of commodity investments through mutual funds. Unfortunately, the story omitted basic facts about mutual fund regulation and oversight, and thus fell short of providing an accurate explanation of the issue and debate.
CFTC Proposal Would Subject Funds to Duplicative, Conflicting Regulatory Requirements
By Sarah Bessin and Rachel Graham
April 15, 2011
Funds use swaps and other derivatives in a variety of ways to manage their investment portfolios, and many of these uses are unrelated to speculation. This is why we have been particularly concerned by a proposal from the Commodity Futures Trading Commission (CFTC) to revise Rule 4.5, which provides an exclusion for funds and certain “otherwise regulated” entities from regulation as commodity pool operators (CPOs).
TOPICS: Commodity InvestmentsFinancial MarketsFund Regulation
The Challenges of Dodd-Frank Implementation
By Paul Schott Stevens
March 31, 2011
Even though our industry was not a direct target of the Dodd-Frank Wall Street Reform and Consumer Protection Act, funds face challenges in coping with the law’s implementation. At the U.S. Chamber of Commerce’s Fifth Annual Capital Markets Summit yesterday, I had a chance to discuss several of these challenges and their implications for funds and regulators alike.
TOPICS: Financial MarketsFund Regulation
40 Years Later, Money Market Funds Still Aren’t Banks
By Brian Reid
March 3, 2011
Paul A. Volcker is a distinguished leader who for decades has devoted his prodigious talents to the service of our country. However, as he makes clear in his recent comment letter to the Securities and Exchange Commission, his long opposition to money market funds—dating back almost 40 years—hasn’t ended.
“Systemically Important” Designation is a Tool That Should Be Used Sparingly
By Paul Schott Stevens
February 25, 2011
This morning, I participated in a panel discussion addressing the business community’s concerns with the Financial Stability Oversight Council’s (FSOC) proposal on the criteria to measure a company’s systemic risk. It was a lively and timely conversation; I wanted to share here some of the perspective that I brought to the panel on behalf of ICI.
TOPICS: Financial MarketsFund RegulationMoney Market Funds
ICI Expresses Concerns to CFTC on Whistleblower Programs
By Tamara K. Salmon
February 9, 2011
Back in December, we commented on the Securities and Exchange Commission’s proposed new whistleblower rules, expressing ICI’s serious concerns about the unintended consequences that will likely result from the program.
TOPICS: Fund Regulation
New ICI Research Examines Money Market Funds’ Pricing
By Rochelle L. Antoniewicz and Sean S. Collins
January 25, 2011
Today, we released new research, Pricing of U.S Money Market Funds. This paper starts by explaining how U.S. money market funds seek to maintain a stable $1.00 per share net asset value (NAV). The NAV is the price at which investors purchase or redeem shares.
ICI’s Response to “Money Market Fund Reform Options”
By Jane G. Heinrichs
January 11, 2011
We’ve just filed a comment letter with the Securities and Exchange Commission addressing the reform options outlined in the President’s Working Group on Financial Markets (PWG) Report on “Money Market Fund Reform Options.”
TOPICS: Fund RegulationMoney Market Funds
Proposed SEC Whistleblower Program Could Backfire
By ICI Viewpoints
December 17, 2010
Today we filed a comment letter on the Securities and Exchange Commission’s proposed new whistleblower rules. Our letter registers the Institute’s very serious concerns about the unintended consequences that will likely result from the program, given its proposed design.
TOPICS: Fund Regulation
SEC Considerably Understates Costs of Rule 12b-1 Reform Proposal
By ICI Viewpoints
December 1, 2010
Following up on our November comment letter to the Securities Exchange Commission, ICI conducted and submitted our own cost-benefit analysis of the SEC’s proposal to replace Rule 12b-1.
TOPICS: Fund GovernanceFund Regulation
U.S. Retirement Success Can Aid in EU Pension Modernization
By ICI Viewpoints
November 15, 2010
Understanding the successes of the U.S. retirement savings framework can aid European regulators as they consider reform of pension systems in the European Union, ICI said in a comment letter.
TOPICS: Fund RegulationInternational
12b-1 Proposal Misses the Mark
By ICI Viewpoints
November 5, 2010
Today, ICI filed its comment letter on the Securities and Exchange Commission’s proposal to replace Rule 12b-1. While our letter commends the SEC for addressing some legitimate concerns with Rule 12b-1, we question the proposal’s timing and breadth, calling it far more extensive and intrusive than necessary.
TOPICS: Fund Regulation
Companies Should Be Designated as “Systemically Significant” Only in Limited Circumstances
By ICI Viewpoints
November 5, 2010
The newly-created Financial Stability Oversight Council (FSOC) has been tasked with determining which nonbank financial companies are systemically significant and therefore require additional regulatory scrutiny. The FSOC has asked for input regarding the specific criteria and analytical framework it should use in making those designations.
TOPICS: Financial MarketsFund Regulation
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