ICI Commends Tough SEC Proposals To Clean Up Mutual Fund Industry

by Phillip Morton, Investors Offshore.com

22 January 2004

The Investment Company Institute has praised the Securities and Exchange Commission’s “bold and far reaching” proposals to reform the mutual fund industry and restore public confidence in the investment community after a series of high profile scandals.

In a statement issued last week, ICI President Matthew P. Fink commented: “We commend the Commission and its staff for putting before the public a set of strong reform measures that build on its regulatory efforts of the last four months - efforts we strongly support.”

He continued that the ICI “may not agree that every change will achieve the benefits that are hoped for. Nevertheless, the mutual fund industry is confident that the reforms the SEC ultimately enacts will greatly strengthen mutual funds and make them better guardians of middle America's long-term investments."

"The public also expects mutual funds to exercise leadership by forcefully responding to the inexcusable trading abuses revealed in recent months. The Investment Company Institute, on behalf of mutual fund companies and their shareholders throughout the country, has called for a series of tough measures to address abuses,” Fink added.

Testifying before the Senate Governmental Affairs Subcommittee on Financial Management last year, Fink called for a series of measures to improve industry regulation, including: a firm 4 pm deadline for all mutual trades to be reported to mutual fund companies; an industry-wide minimum 2% redemption fee on the sale of virtually all mutual funds (other than money market funds) for a minimum of five days following purchases; and inclusion in ICI member companies' codes of ethics oversight of all short-term purchases and sales by senior fund personnel in mutual funds offered or sponsored by the company.

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