tailieunhanh - Reforming the Taxation and Regulation of Mutual Funds: A Comparative Legal and Economic Analysis

The Californian Public Employees‟ Retirement System (CalPERS) has approximately USD 231 billion in assets and is the largest public pension fund in the United States. Since 2006, CalPERS has committed USD 500 million to external managers in its Global Equity asset class who restrict companies with a negative environmental footprint. CalPERS has committed more than USD billion to its private equity Environmental Technology Program, and has strongly advocated the reporting of environmental risk in its engagements with federal regulators and portfolio companies. . | June 10 2009 Reforming the Taxation and Regulation of Mutual Funds A Comparative Legal and Economic Analysis John C. Coates IV John F. Cogan Jr. Professor of Law and Economics Harvard Law School 1525 Massachusetts Avenue Griswold 400 Cambridge MA 02138 Email jcoates@ Abstract Most Americans invest through mutual funds. A comparison of US tax and securities law governing mutual funds with laws governing other collective investments in both the US and in the EU shows a the US fund industry continues to be the world leader but now lags domestic and foreign competitors primarily because of US tax and securities law b mutual funds are taxed less favorably and regulated more extensively in the US than direct investments or other collective investments including alternatives available only to wealthy investors c the structure of US regulation - numerous proscriptive bright-line rules written nearly 70 years ago subject to SEC exemptions - makes success of US mutual funds dependent on the resources responsiveness and flexibility of the SEC d while the high-level formal framework for mutual funds in the EU is as or more restrictive and inflexible in most respects than the Investment Company Act competitive pressures in the EU constrain supervisors in EU countries to be more flexible in adopting implementing regulations and EU regulators have greater resources and are more responsive than the SEC which could achieve the same flexibility and responsiveness through exemptive orders but has been unwilling or unable to do so in a timely fashion. The paper discusses a number of reforms to improve the treatment of middle class investments including improvements in mutual fund taxation ways to enhance the flexibility and resources of US fund regulators modifications of the existing ban on asymmetric advisor compensation and the exclusion of foreign funds and unjustified disparities in the treatment of mutual funds and mutual fund substitutes. 1 Over the past 50 years