"We've got two choices put before us. One choice is to stay in the world of paper, to say no to innovation, to continue to damage the environment and at a lot of cost to shareholders, or we can choose innovation."
| David Blass|
general counsel of the Investment Company Institute (ICI
), made that call to arms the centerpiece of his opening remarks this morning at the 2016 ICI Mutual Funds and Investment Management
conference at the J.W. Marriott Grande Lakes in Orlando, Florida. About 1,200 fundsters and their allies have gathered for the annual confab.
Blass points to electronic delivery innovation driving dramatic changes in the banking, healthcare, music, and movie industries. He highlights the enormous monetary (hundreds of millions of dollars) and environmental costs of paper shareholder reports. One tree makes enough paper for 128 shareholder reports, Blass notes, and the industry produces 240 million such reports per year; that translates into 1.875 million trees per year. And he estimates that the rule change will save mutual fund shareholders $2 billion over the next 10 years.
Blass calls on fundsters to rally against the paper industry and an unnamed vendor that delivers shareholder reports for broker-dealers (and could charge up to $1 billion extra over 10 years for not delivering paper reports thanks to an old NYSE rule). He points out that the SEC's proposed electronic delivery rule, which the ICI strongly supports and even offered supplementary suggestions around, would still allow any investor who wants paper reports to simply ask to receive them (instead of electronic delivery).
"The SEC deserves tremendous credit ... for taking the first steps forward to move away from this paper era," Blass says.
Blass wants the SEC to shift that rule from the NYSE to Finra and wants to SEC electronic delivery rule to pass. (This morning the ICI sent comment letters on the subject to the SEC
, NYSE and Finra.) And he urges fundsters to step up their electronic innovation game.
"We've got to make good on it. We've got to come through," Blass says. "We've got to think creatively about fund shareholder disclosures."
"To me, the choice is easy. This is a no-brainer," Blass says. "I ask them [the SEC] to vote for innovation."
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