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.

Below is an abridged version of their discussion. To read the full Q&A, please see ICI’s 2019 Annual Report to Members.

Retirement

From left to right: Allen C. Huffman, director, retirement security and tax policy; Peter J. Gunas III, government affairs officer, retirement security and tax policy; Sarah A. Holden, senior director, retirement and investor research; and David M. Abbey, deputy general counsel, retirement policy.

The SECURE Act [Setting Every Community Up for Retirement Enhancement Act] progressed rapidly this year, and it had overwhelming bipartisan House support. How did we get here?

Peter Gunas: I think the bipartisan success of this bill reflects how important retirement savings issues have become. Retirement policy has become an issue that Congress is eager to address. ICI—along with member firms and other partners—spent a lot of sweat equity in educating members of both parties about provisions in SECURE and how they’ll be effective in helping Americans save for retirement. So, SECURE is a culmination of all that effort and advocacy aligning with the desires of policymakers.

Allen Huffman: We worked hard to disabuse policymakers of the notion that the United States faces a retirement crisis. We did this by showing them that the rhetoric is often based on erroneous data that obscure the fact that the system is working well for most Americans. It was a major goal of our early meetings to help policymakers understand the reasons underlying why specific populations are not participating in retirement savings vehicles, and to share methods for increasing that coverage.

Gunas: I’d like to add that bringing our top-notch economists and lawyers to the Hill is the bedrock of ICI’s advocacy work—providing honest, timely, and trusted information to those who are actually drafting the legislation. So, from a mutual fund perspective, the SECURE Act reflects years of sustained outreach of this sort. It’s a team effort with ICI, member firms, and key allies.

Sarah, can you expand on how ICI Research is involved in our discussions with policymakers?

Sarah Holden: As we go to regulators or to Capitol Hill, we always take fact-based research with us because it’s important to understand the lay of the land before you start making suggestions on how you might improve the landscape. Our positions on the issues raised in the SECURE Act were all based on research. For instance, we know that coverage is lower among smaller employers, and so we supported multiple employer plans. We also know from our research that most IRA investors who take money out do so because the law requires them to—starting at 70½, an age that was set decades ago when life expectancy was lower. We supported allowing folks to preserve that nest egg a bit longer before they have to start taking the money out. So, key elements of the SECURE Act were supported by data on coverage as well as the actual withdrawal activity of today’s retirement investors.

How does our legal analysis shape the response?

David Abbey: Our legal analysis complements ICI’s outstanding research capabilities on retirement issues. Helping policymakers understand what the research shows works and doesn’t work, and then how the legal rules can be changed to better effectuate what works, is critical to achieving desired changes.

There seems to be a shift to the idea of building up the current system rather than, say, tearing down the house and starting over again. Why is that?

Holden: I think there’s a recognition of the innovation that’s occurred over time and the sheer size of the current US retirement system. We’ve got [more than $29 trillion] earmarked for retirement and 60 percent of that is in defined contribution plans and IRAs where individuals are managing the money for themselves and doing a very good job of it. So, I think there is finally recognition that the house is large and substantial and simply needs updates, rather than a teardown.

How have our efforts changed attitudes toward the defined contribution system?

Gunas: Our focus on enhancing the current system to expand coverage and reduce administrative burdens so that employers have more capacity to offer plans has been a staple of ICI’s lobbying for years. From a congressional perspective, the input ICI has provided to the Hill in favor of the voluntary employer-provided retirement savings system has really helped move the needle away from some of the mandated, government-prescribed approaches that have been more prevalent in the not-too-distant past. There are still outlier proposals, but for the present, Congress intends to build on the current voluntary system. Also, good policy won out during the debate on last Congress’s tax reform efforts—and that really helped solidify the benefits of tax deferral for retirement savings and the importance of the private sector.

Huffman: Part of the story is how we’ve turned around the faulty narrative that we need to return to the “golden era” of defined benefit plans. Data show that few Americans actually reaped the benefits of defined benefit plans. We’ve been able to change the understanding of this misperception and show that 401(k) plans can provide Americans with greater security in their retirement future.

Holden: In the academic and press communities, the crisis narrative and defined benefit nostalgia have been strong. But there has been a bit of a shift in that you see more of these communities suggesting that we need to get more individuals into defined contribution plans and IRAs. It suggests an acceptance of the power of those retirement savings tools. So, I think the shift in the dialogue has definitely gone toward the need to make individual, account-based saving work for more people.

Visit our Retirement Resource Center to find out more about ICI research and other useful information about America’s retirement system. Also, follow us on social media—Twitter, Facebook, and LinkedIn—to receive information about top news stories on the industry, notices of ICI releases, and stories on retirement.

David M. Abbey is deputy general counsel, retirement policy; Peter J. Gunas III is government affairs officer, retirement security and tax policy; Sarah A. Holden is senior director, retirement and investor research; and Allen C. Huffman is director, retirement security and tax policy at ICI.

Permalink: https://www.ici.org/viewpoints/19_view_retirementqa

TOPICS: 401(k)Fund Regulation Government Affairs Mutual Fund Retirement Policy Retirement Research Shareholder

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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.

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First in a series on money market funds.

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July 8, 2016

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February 22, 2016

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hedge risk;
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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.

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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.

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.

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.

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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.

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?

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.

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.

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.

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.

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.

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)

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.

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.”

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.

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.

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.”

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.

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.

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).

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).

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).

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.

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.

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:

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.

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.

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:

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.

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.

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.

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.

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.”

“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.

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.

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.

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.

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.

“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.

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.

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.

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.

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.

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.

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.”

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.

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).

“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.

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.

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.

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.

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.

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.”

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.

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).

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

‘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.

Read more…

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.

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.

Read more…

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.

Read more…

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.

Read more…

TOPICS: Fund Regulation ICI 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.

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.

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.

Read more…

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.

Read more…

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.

Read more…

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.

Read more…

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.

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.

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.

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.

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.

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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.

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.

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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.

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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.

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.

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.

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.”

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.

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).

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.

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.

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.

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).

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.”

A Thoughtful Approach to Regulating Derivatives and Protecting Investors

Robert C. Grohowski

November 8, 2011

A Thoughtful Approach to Regulating Derivatives and Protecting Investors

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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.

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.

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.”

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.

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.

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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.

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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.

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.

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.

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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.

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.

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TOPICS: Events Fund 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).

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.

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.

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.

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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.”

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.

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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.

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TOPICS: Fund Governance Fund 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.

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TOPICS: Fund Regulation International

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.

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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.

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ICYMI: A Q&A with Members of ICI’s Retirement Team

The SECURE Act [Setting Every Community Up for Retirement Enhancement Act] progressed rapidly this year, and it had overwhelming bipartisan House support. How did we get here?

Sarah, can you expand on how ICI Research is involved in our discussions with policymakers?

How does our legal analysis shape the response?

There seems to be a shift to the idea of building up the current system rather than, say, tearing down the house and starting over again. Why is that?

How have our efforts changed attitudes toward the defined contribution system?

2019 Annual Report to Members: A Letter to ICI's Membership

By George C. W. Gatch and Paul Schott Stevens

Closed-End Funds: Opportunities for a True Renaissance

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The ETF Rule: Paving the Way for Further Growth and Success

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Four Wrongs Don’t Make a Right—A Financial Stability Proposal Falls Short

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2019 Investment Company Fact Book: Letter from the Chief Economist

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SEC Chairman Jay Clayton Tackles Hot Topics at GMM

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A Year of Advocacy: IDC’s 2018 Annual Review

Amy B. R. Lancellotta

ICI’s 2018 Annual Report: Letter from the President

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Common Ownership: "Puffery" in the Legal Analysis

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Common Ownership: Ignoring the Age-Old Conflict Between Owners and Managers

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Common Ownership: Faulty Assumptions on Investors’ ‘Economic Interests’

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SEC Should Reject Complex, Costly “Pass-Through” Proxy Voting

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Fund Adviser Proxy Votes Align with Fund Interests

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“Common Ownership” Hypothesis Is Unconvincing

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SEC Commissioner Michael Piwowar: A Commitment to Markets, Shareholders...and Facts

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2018 Investment Company Fact Book: Letter from the Chief Economist

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Education, Outreach, Advocacy: A Big 2017 for IDC and Fund Independent Directors

By Amy B. R. Lancellotta

States Are Abusing Abandoned-Property Funds to Plug Budget Shortfalls

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Independent Directors’ Stringent Oversight Contributes to Decline in Fund Fees

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More People Are Building Nest Eggs with Their IRAs

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Congress Must Spike “FIFO” for All Investors

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A Way Forward on Modernizing Fund Director Responsibilities

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2017 Annual Report to Members: A Message from the Chairman

By William F. “Ted” Truscott

Let’s Make Disclosure Reform Serve Shareholders

By Dorothy Donohue

Applying Evidence to Theories on Regulated Funds

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Cybersecurity at Work: To Confront Evolving Threats, Flexibility Is Key

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Simulating a Crisis

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New ICI Paper Helps Readers Understand ETF Listing Processes and Standards

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DOL Fiduciary Rule Review Is Opportunity for SEC

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Americans Trust in Their 401(k) Plans

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Funds Actively Seek Companies’ Sound Management

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Industry Leaders Highlight Opportunities Presented by Industry Change

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A Tech-Enabled Future—and Present—for Investment Advice

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Stevens Calls for Measures to Enhance Economic Growth

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2017 Investment Company Fact Book: Letter from the Chief Economist

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What's the “Exposure” of Money Market Funds to Europe?

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Mutual Funds and ETFs’ Share of the Corporate Bond Market: What’s the Right Answer?