Home Listing

Largest Investors Demand Market Reform From SEC

<em>CalPERS and other large pension funds have demanded the SEC reform financial markets to make them more attractive to investors following the economic crisis.</em>
Reported by Featured Author

(February 14, 2012)  —  A group of the world’s largest pension funds have called on the United States’ financial regulator to implement market reforms to help boost investor confidence.

The California Public Employees’ Retirement System (CalPERS) led a group of 10 US, European and Australian funds to send a letter to Mary Schapiro, Chair of the Securities and Exchange Commission, yesterday outlining a list of changes they wanted implemented.

The letter said: “Despite the enactment of the Dodd-Frank Wall Street Reform and Consumer Protection Act, we believe there is unfinished business that is critical to protecting and strengthening shareowner rights and investor confidence in the financial markets.”

The list of financial market reform priorities – entitled An Investor’s Framework for the Future: Financial Market Reform Priorities for the SEC – outlined six initiatives that the SEC should complete, including:

Appoint the Investor Advisory Committee to provide the Commission with investors’ perspectives on regulatory issues; appoint the Investor Advocate to champion investor rights.

Renew rulemaking for universal proxy access so that investors can propose directors for boards on a level playing field with management.

Adopt final rules on the remaining executive compensation reforms under the Dodd-Frank Wall Street Reform and Consumer Protection Act.

Continue work on International Financial Reporting Standards to ensure high quality accounting in global markets

Provide for an accountable and transparent ratings system with full disclosure on data and models used to develop securities ratings. Develop an independent mechanism to track the accuracy and effectiveness of the ratings process and complete the study of financing alternatives for credit rating agencies

Clarify and ensure compliance with the Commission’s interpretive guidance on climate risk disclosures. Include climate change disclosure and the process for including diversity considerations into the corporate board nomination process in the newly created Investor Advisory Committee’s overall mandate to provide advice and recommendations. Ensure that relevant environmental, social, governance and diversity reporting is integrated into financial reporting frameworks. 

The letter continued: “The Commission plays a vital role in bolstering investor confidence in the public markets by adding transparency for investors, enforcing director independence, and enhancing governance. The undersigned stand ready to assist the Commission to combat efforts to weaken or roll back the important investor protection provisions of Dodd-Frank.”

The signatories to the letter were: AustralianSuper, All Pensions Group, BT Pension Scheme, CalPERS, California State Teachers’ Retirement System, Connecticut Retirement Plans and Trust Funds, Co-operative Asset Management, Florida State Board of Administration, F&C Management, Office of New York City Comptroller, Ohio Public Employees’ Retirement System, PGGM, RPMI Railpen, Universities Superannuation Scheme.