Legislation in the 108th Congress

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In the 108th Congress, the House Financial Services Committee reported legislation to enhance the federal regulatory requirements for mutual funds. This legislation, H.R. 2420, was introduced by Representative Richard Baker (R-LA), the Chairman of the House Financial Services Subcommittee on Capital Markets, Insurance and Government-Sponsored Events, on June 11, 2003. The bill subsequently was reintroduced with House Financial Services Committee Chairman Michael Oxley (R-OH), the Oxley substitute, and passed the House Financial Services Committee on July 23, 2003. The House of Representatives passed an amended version of H.R. 2420 on November 19, 2003.


The Coalition of Mutual Fund Investors supported this Baker/Oxley legislation. The Coalition also supported amendments to this legislation to improve its effectiveness for mutual fund investors. For example, the Coalition supports: (1) more disclosure of the estimated amount of operating expenses borne by each shareholder; (2) more disclosure of the portfolio transaction costs associated with mutual fund brokerage activities; (3) full disclosure of all payments involved in the sale or distribution of mutual fund shares; (4) full disclosure of shareholder identity and transaction information to mutual funds; and (5) enhanced investor access to mutual fund policies and practices described in the Statement of Additional Information.


In the Senate, Senators Peter Fitzgerald (R-IL), Carl Levin (D-MI) and Susan Collins (R-ME) introduced a mutual fund reform bill that incorporated almost all the reforms advocated by CMFI, S. 2059, the Mutual Fund Reform Act of 2004. This bill is by far the most comprehensive mutual fund bill which has been introduced. Please click here for CMFI's letter of endorsement of this legislation. In the House of Representatives, Congressman Paul Gillmor (R-OH) introduced H.R. 4505, the companion legislation to Senator Fitzgerald's bill.


Additionally, several other Senators introduced legislation in response to the growing problems that have been uncovered in the mutual funds industry. Senator Daniel Akaka (D-HI) has introduced similar legislation to H.R. 2420 in the U.S. Senate, S. 1822, on November 5, 2003. Senator John Kerry (D-MA) introduced S. 1958, on November 25, 2003. Senators Jon Corzine (D-NJ) and Christopher Dodd (D-CT) introduced S. 1971, also on November 25, 2003.