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March 18, 2014

Fund Firms Say Too-Big-to-Fail Label Would Hurt Investors

“U.S. mutual fund companies are pushing back against claims that some firms may be too big to fail, saying that subjecting a few large money managers to more regulation would hurt competition and ultimately fund investors.

“New costs and new regulations applied selectively will distort the competitive landscape of our industry,” Paul Schott Stevens, president of the Investment Company Institute, the fund industry’s trade group, said in a speech today in Orlando, Florida. “The consequences of SIFI designation could significantly impair fund investing.”

“ICI members including BlackRock Inc. (BLK), Pacific Investment Management Co. and Fidelity Investments have lobbyied regulators and lawmakers to avoid being labeled by U.S. and international regulatory bodies as systemically important financial institutions, or SIFIs. The designation could lead to tighter capital, leverage and liquidity rules like those faced by banks.”

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Read full Bloomberg article here.

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