Regulation

While index funds already have a place in the lineup of most 401(k) plans, a proposed federal mandate to require at least one index fund option in these plans is intrusive and unnecessary, according to industry experts.

After several failed attempts, the Securities and Exchange Commission is again revisiting the contentious debate on shareholder proxy voting.

European Union Internal Market Commissioner Charlie McCreevy is expected to propose uniform new rules regarding depositories for undertakings in collective investments in transferable securities (UCITs), the European Commission’s version of mutual funds.

The Connecticut state Senate passed a bill to require more disclosure and transparency of hedge funds, private equity firms and venture capitalists. It would also require the investment firms to disclose conflicts of interest to investors.

The Internal Revenue Service has proposed new rules that would grant safe harbor for employers experiencing substantial business hardship that want to suspend or reduce their 401(k) matches.

Government actions to stabilize asset-backed commercial paper, including the Asset-Backed Commercial Paper (ABCP) Money Market Mutual Mutual Fund Liquidity Facility (AMLF) and the Money Market Investor Funding Facility (MMIFF), are helping to stabilize ABCP and other short-term instruments, Fitch reports. However, ABCP credit ratings are not improving.

In its zeal to apply a free market philosophy to the Securities and Exchange Commission, the Bush administration created an environment where the agency's enforcement staff was unable to take definitive policy positions or bring enforcement actions, according to Mercer Bullard, associate professor of law at the University of Mississippi School of Law.Testifying on May 7 at a Senate Banking subcommittee hearing, Mercer said that the problems at the SEC reflect a state of "deregulatory capture," where the commission was unaware of and unable to respond to many enforcement matters before they surfaced.

Risk management has taken on a whole new meaning after the crazy behavior of markets during the past 18 months.

The Securities and Exchange Commission is considering making significant changes to money market mutual funds because there is still a danger that these funds could be unable to meet redemptions when investors begin to step off the sidelines en masse and move back into equity markets.

Mary Schapiro, chairman of the Securities and Exchange Commission, bridled against the proposal that the government create a consumer financial protection agency. Evidently, the SEC wants to maintain its regulatory control over mutual funds.