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Governance

Seven Questions for ICI Chair Greg Johnson

January 23, 2012 - "I cannot think of a time when ICI faced more top-tier issues that could directly affect mutual fund investing,'' Gregory E. Johnson, incoming chairman of the Investment Company Institute, says.

Regulators: We Don't Have All The Answers On Volcker

January 23, 2012 - The regulators charged with implementing the Volcker Rule have posed 1,300 questions to the public, but on Wednesday, at a House subcommittee hearing, they fielded one query they seemingly hadn't considered.

Trustees on Watch for 'The Perfect Storm'

September 19, 2011 - Fund Directors Concerned Over Increased Use of Alternatives

911 for 9/11

September 5, 2011 - 10 Years Afgter 9/11, It is High Time to Withdraw Our Troops

The Say on Pay

May 23, 2011 - Vanguard, BlackRock, ING, Lord Abbett Called 'Executive Pay Enablers'

SEC Votes to Propose Revamp of 12b-1 Fees

July 26, 2010 - Long-contested issue finally meets the SEC impasse. But industry insiders say they're ready to fight.

Test of the Massey Mine

May 24, 2010 - Fund giant boards of directors at AllianceBernstein, American Funds, Fidelity, Vanguard and others are reportedly starting to bring about meaningful change in the corporations in which they are invested. Proof should come any day now, when the shareholder proxy votes from the annual meetings are released. Fund chief executive officers spoke about the power and influence their proxies wield in an interesting Reuters article last week, "Mutual Funds Seek to Shed 'Rubber Stamp' Tag."

Robust Board Oversight Can Squelch Lawsuits

April 26, 2010 - WASHINGTON -- A robust, well-documented oversight process by mutual fund boards can help to keep investor lawsuits at bay, but good documentation is not enough. Experts say boards must also stay on top of a wide range of developments in derivative exposure and potentially misleading advertisements, among other things. The recent, well-publicized Supreme Court decision Jones v. Harris Associates has reaffirmed the crucial role boards play in setting fund fees, and has heaped even more responsibility on directors.

Companies Brace for Active Proxy Season

February 15, 2010 - This year's proxy season could be very turbulent for corporate boards of directors, thanks to increased shareholder activism and new rules that increase proxy disclosure."Companies need to reach out and have good relations with their shareholders," said Amy Goodman, a partner and co-head of the securities regulation and corporate governance practice at Gibson, Dunn & Crutcher. "This is going to be a very difficult proxy season. Boards should be attuned to where potential problems may be."

Estate Tax Expiration Reveals Opportunities

February 8, 2010 - NEW YORK - Financial experts think 2010 could provide many interesting opportunities in the realm of wealth transference, particularly with the temporary, one-year expiration of the federal estate tax and reduction of the gift tax.Thanks to the expiration of the estate tax on Jan. 1, beneficiaries of people who die this year don't have to pay federal taxes on inherited estates. Unless Congress takes action this year, the tax will be reinstated in 2011 to 2001 levels of a $1 million exemption and 55% tax rate above that. President Barack Obama has proposed reinstating the tax at 2009 levels of 45% on anything above $3.5 million, possibly retroactively.

Extreme Makeover: 401(k) Edition

February 8, 2010 - Investors are about to test drive 401(k) plans with a 21st Century whole new look and feel.The Department of Labor is promising streamlined rules for 401(k) advice that plan sponsors may actually use (see "Week in Review," page 4). The government is looking into the possibility of offering annuities or other lifetime income options in defined contribution plans.

403(b) Group Seeks Common Language

February 8, 2010 - An industry group developing best practices for 403(b) retirement plans is coming closer to streamlining these plans to make them even more similar to 401(k) plans, but first they will have to get everyone to agree to speak the same language.Leaders say the SPARK Institute's work on 403(b) best practices is coming along smoothly, thanks to the cooperative efforts of approximately 50 participating institutions. The latest update, version 1.04, fixes many of these communication issues by requiring a standardized reporting format, which it hopes most institutions will adopt by this July.

SEC Tightens Money Fund Rules

January 29, 2010 - The Securities and Exchange Commission last Wednesday adopted several amendments to Rule 2a-7 governing money market funds that aim to reduce risks by increasing credit quality, improving liquidity, shortening maturity limits and requiring the disclosure of a fund’s “shadow” net asset value.The Commission fell short of requiring a floating NAV, but said it may still consider such a move in the future, as well as eliminating the disclosure delay on holdings and the use of credit ratings agencies.

New Financial Regulations to Create Unprecedented 'Sea Change' at SEC

January 25, 2010 - BOSTON -- Mutual fund companies must stay on top of their compliance programs, particularly because Congress is likely to pass new financial regulations, executives warn. "Regulation writing is about resolving tensions and balancing purposes,' said Michael Novey, associate tax legislative counsel at the Office of Tax Policy at the Department of Treasury. "Our task is to implement legislative purpose, recognizing that Congress' acts ought to be workable. There is a tremendous amount of misunderstanding about many of the proposed regulations."

BNY Mellon Aims to Curb Costs, Expand Wealth Unit

January 25, 2010 - As it waits for the fee income that will come once interest rates rise, Bank of New York Mellon will continue to try and control costs and focus on expanding its asset management and asset servicing businesses overseas, the firm said during an earnings call last Wednesday. Robert Kelly, BNY Mellon's chief executive, said the firm will cut expenses by $100 million, or 4.3%, this year. "There are a lot of opportunities to drive efficiencies in our businesses," he said. "Executives will re-engineer operations to make us more efficient."