(August 14, 2013) — The California Public Employees’ Retirement System (CalPERS) has called on the Securities Exchange Commission (SEC) to improve the deal for investors in the post-financial crisis world.
In meeting documents published last week, CalPERS outlined a range of issues it urged the SEC to address to protect investors—and help the world economy to get back on its feet.
It said the SEC had a vital role in ensuring efficient and fair market function, but needed to be given “the tools to do the job: full and independent funding.”
Items that needed the SEC’s attention included the Jumpstart Our Business Start-ups Act, which reduced long-standing investor protections and relaxed critical financial disclosures under the auspices of improving capital formation, the CalPERS statement noted. “We oppose the erosion of investor protections and believe providing investors [with] fewer rights and less information is more likely to discourage the allocation of capital by institutional investors.”
CalPERS reminded the SEC of its position as a $265 billion asset pool that invested on behalf of 1.6 million workers, and said that three years after the arrival of the Dodd-Frank Act there remained “unfinished business that is critical to protecting and strengthening shareowner rights and investor confidence in the financial markets.”
It pressed the SEC to “establish a proactive agenda to advance the mission of protecting investors, maintaining fair, orderly, and efficient markets, and to facilitate capital formation.”
The document highlighted various other sections of the financial markets that needed attention, including updates to the SEC’s proxy voting rules, which it claimed had not been updated since 1976 despite huge leaps in technology and experience.
CalPERS suggested the SEC created its own credit rating system, that would be able to track the current agencies, their methods, and how each was financed for the work carried out.
“Without comprehensive and effective financial market reform, we run the risk that systemic risk goes unchecked, and pension fund assets are again made vulnerable. Another financial downturn would erode those assets and undermine the retirement security of the beneficiaries we represent.”
To read the entire document, click here.
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