Council of Institutional Investors

Council of Institutional Investors Executive Director Ken Bertsch Testifies on the Financial CHOICE Act

Says CHOICE Act Would Undermine Confidence in U.S. Capital Markets,
Weaken Critical Investor Protections and Rights
April 28 Hearing Before the House Financial Services Committee

Washington, D.C., April 28, 2017 — The Financial Choice Act “would weaken critical shareholder rights that investors need to hold management and boards of public companies directors accountable, and that foster trust in the integrity of the U.S. capital markets,” Council of Institutional Investors (CII) Executive Director Ken Bertsch said in written testimony prepared for an April 28 hearing of the U.S. House Financial Services Committee.

Institutional investors are deeply troubled that the bill would loosen safeguards put in place after the 2001 Enron scandal and the 2008 financial crisis to protect investors, American savers and the capital markets.

In his testimony, Bertsch outlined five ways that the Act “threatens fundamental shareholder protections.”  The bill would:
  • Set prohibitively costly hurdles on shareholder proposals
     
  • Roll back curbs on abusive pay practices
     
  • Restrict the right of shareholders to vote for directors in board elections
     
  • Create an intrusive new regulatory scheme for proxy advisors
     
  • Shackle the Securities and Exchange Commission (SEC) with excessive and unworkable cost-benefit analysis requirements
CII is a nonprofit organization of pension funds, other employee benefit funds and endowments with $3 trillion in combined assets. Member funds include major long-term shareowners with a duty to protect the retirement savings of millions of workers, retirees and their families. CII’s associate (nonvoting) members include asset management firms that manage in excess of $20 trillion. CII advocates for policies that we believe enhance public trust in the capital markets, protect investors and promote long-term shareowner value.
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Click for PDF version. For media inquiries, please contact CII Deputy Director Amy Borrus.