By Paul Atkins
The California Public Employees’ Retirement System this month said no thank you to pension-fund activism. Government workers unseated Priya Mathur, the sitting Calpers president. She was defeated by Jason Perez, a police-union official who criticized Ms. Mathur’s focus on environmental, social and governance investing, or ESG. Mr. Perez emphasizes the agency’s fiduciary duty to maximize investor returns.Read More
Patomak Senior Adviser Luther Strange opines in RealClearMarkets:
Climate change is a serious issue that impacts every person, deserving a serious public-policy debate through our democratic process… Lawsuits will not develop sound public policy, and they will certainly not halt climate change. And the reality that two federal judges have now dismissed city climate cases should send a strong message to other local leaders: the courts are not the proper place to make climate policy.Read More
Paul Atkins writes in an opinion piece exclusive to Pensions & Investments:
“Pension funds must invest long-term to meet the anticipated needs of retirees. Every dollar counts, and long-term growth is essential, especially because markets do not always go up. Managing other people's money is not a trivial pursuit — it demands prudence, patience and perception, not political gamesmanship. “Read More
By Paul S. Atkins and Gregory F. Jacob
The Securities and Exchange Commission and the Labor Department have both asserted the authority to regulate investment brokers. The two of us—a former SEC commissioner and a former labor solicitor—have a word of advice for Labor concerning its recent efforts to adopt new rules on broker conflicts of interest: It’s time to pass the baton.Read More
Opinion by Paul Atkins
Just as Washington is becoming more investor-friendly, some politicians are going back to fighting in favor of well-connected special interests over Mr. and Mrs. 401(k). The latest example: A policy rider (let's call it what it is - an earmark) attached to an appropriations bill that would prevent a long-overdue effort to save retirees and investors more than $300 million a year by modernizing how mutual fund reports are delivered to shareholders.Read More
Paul Atkins writes in an op/ed in Real Clear Markets:
The tax reform bills moving rapidly through Congress ... would leave more in the pockets of working Americans and reduce the role that taxes play in financial decision-making, allowing people to take their own paths without much help or hindrance from Washington.
But one provision in the Senate version of the bill would restrict Americans’ ability to make their own financial decisions. The measure would dictate how investors manage their portfolios of stocks, bonds and other securities.
The Senate bill would mandate a first-in, first-out (FIFO) scheme. When investors who hold multiple positions in the same security decide that it is time to sell, the government would force them to sell their oldest shares first. Requiring stock sales to be made on this FIFO basis will usually mean higher taxes for investors who sell their holdings accumulated over time. The FIFO provision’s tax implications will limit the ability of American households to fully realize gains from successful investments.Read More
Manley Johnson and Paul Atkins write in a co-authored opinion piece in American Banker's BankThink:
"The Treasury Department recently released a new report endorsing numerous regulatory reforms for U.S. asset managers and insurance companies and is about to release another report next week assessing the Financial Stability Oversight Council, an unaccountable regulatory body created in 2010 by the Dodd-Frank Act.
During the past seven years, FSOC has threatened to use its sweeping powers to subject asset managers and insurers to cumbersome, inappropriate bank-style regulation by the Federal Reserve, whose leadership lobbied for and embraced these nonbank regulatory powers. Treasury’s recent report endorses some policies that will undo the damage of this regulatory framework, but it can do much more. Fortunately, the upcoming Treasury report on FSOC and the pending ascension of a new Fed chair provide perfect opportunities to abandon Dodd-Frank-inspired regulatory hubris and begin improving economic growth and financial access..."Read More
Patomak Senior Advisor Craig Lewis writes:
As my students are back in lecture halls this fall, they are being reminded that it is more important to complete their assignments properly, rather than quickly. Mistakes at the beginning invariably lead to disappointing conclusions. That’s a lesson worth repeating to regulators in Washington too.
Take, for example, the Department of Labor’s fiduciary rule, which went into partial effect in June with the objective of improving the efficiencies in the market for retirement services upon which Americans rely. The rule’s regulatory impact analysis, produced in April 2016, found that imposing a fiduciary standard on brokers would save Americans billions.
However, as my new white paper shows, the Labor Department’s projections were based on incorrect interpretations of academic research.Read More
In a guest column in The Hill, Paul Atkins explains that “between 2009 and 2016, critical operational issues and infrastructure problems were ignored as the SEC strayed from its tripartite mission of protecting investors, facilitating capital formation, and ensuring efficient capital markets.”
Atkins cites the suite of investment management-focused rulemakings advanced at the SEC in 2015 and 2016 as a prime example of the agency’s previously misguided agenda. The solution? Atkins writes that “the SEC should re-examine, modify, and potentially rescind overly-complex mutual fund regulations, such as its fund data reporting and liquidity risk management rules.”
Atkins argues the agency should address its well-documented organizational deficiencies and prioritize its statutory mandate to protect and enhance our capital markets. He says SEC Chairman Jay Clayton is the right person to do the job as his response to the recent discovery of the SEC’s 2016 cybersecurity breach shows.Read More
SEC Chairman Jay Clayton recently delivered a highly encouraging maiden-run speech at the Economic Club of New York that set forth a fundamental roadmap for his tenure at the SEC. The ultimate outcome should be less partisan politics at the agency and more focus on core issues confronting investors and the capital markets.Read More
By Paul Atkins
News of a bipartisan effort underway in the U.S. Senate to reform the housing finance industry is a welcome development, but the devil is in the details.
Almost a decade after the financial crisis, in addition to repairing damage caused by the flawed Dodd-Frank law, policymakers must work swiftly to wind-down Fannie Mae and Freddie Mac, the two institutions at the heart of the last financial crisis.Read More
By Paul Atkins
This week, the U.S. Department of Labor’s highly controversial fiduciary rule — crafted during the Obama administration — is slated to go into effect. Fortunately, it is not too late for Labor Secretary Alexander Acosta to take decisive corrective action in light of recently changed circumstances to put the entire flawed rule on hold, but time is running out.
Paul Atkins, Patomak Global Partners CEO, writes in an op/ed in Forbes: Even amidst the rancor and divisiveness that currently blanket Washington, the federal government has a bipartisan opportunity to reduce costs and improve disclosure for investors, while in the process helping the environment, and eliminating expensive, unnecessary papershuffling. Unfortunately, the Securities and Exchange Commission (SEC) struck out on an opportunity to get it done at its public meeting last month.Read More
Regulatory harmonization sounds like a noble goal. But instead of facilitating cooperation among regulators from different jurisdictions, it has morphed into the imposition of one-size-fits-all regulatory standards.Read More
Public-policy advocacy is essential for building shareholder value in corporations.Read More
Volatilty, flash-crash risks and bigger dark pools are the legacy of the SEC's Regulation NMS.
By Paul Atkins
IEX, the self-declared anti-high-frequency trading venue praised in Michael Lewis's 2014 book, "Flash Boys," has filed an application with the Securities and Exchange Commission to change from a "dark pool" to a full-fledged stock exchange. Good news, one might think. But in so doing, IEX has exposed the regulatory quagmire harming the U.S. securities markets.Read More