The 14 pension funds and plan sponsors representing $1.6 trillion in assets called on the U.S. Securities and Exchange Commission (SEC) to complete what they called “unfinished business” in the wake of the financial crisis. “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 group said in a letter to Mary Schapiro, chair of the SEC.
The list of financial market reform priorities – An Investor’s Framework for the Future: Financial Market Reform Priorities for the SEC – outlines six initiatives that the SEC should complete, including:
- Appoint the Investor Advisory Committee to provide the Commission with investors’ perspectives on regulatory issues and 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; and
- 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 (otherwise known as sustainability issues) and diversity reporting is integrated into financial reporting frameworks.
Investors signing the letter include:
- AustralianSuper Pty Ltd,
- All Pensions Group (APG),
- BT Pension Scheme Management Ltd,
- California Public Employees’ Retirement System,
- California State Teachers’ Retirement System,
- Connecticut Retirement Plans and Trust Funds,
- Co-operative Asset Management,
- Florida State Board of Administration,
- F&C Management Ltd,
- Office of New York City Comptroller,
- Ohio Public Employees’ Retirement System,
- PGGM Vermogensbeheer B.V. (PGGM),
- RPMI Railpen, and
- Universities Superannuation Scheme (USS).
A copy of An Investor’s Framework for the Future: Financial Market Reform Priorities for the SEC can be found at http://www.calpers.ca.gov in the Press Room.The letter is available at http://www.calpers.ca.gov/eip-docs/about/press/news/financial-market-reform.pdf.