Asset managers are fighting a proposal by U.S. antitrust authorities to tighten the scrutiny of how these companies influence the way businesses operate and, therefore, the prices of everything from airline tickets to food.
In March, the asset management industry pushed back the proposed rule over a video call with congressional staff. Executives from Capital Group Cos., Fidelity Investments, Nuveen LLC and Wellington Management Co. have joined others, people familiar with the matter said. The Securities Industry and Financial Markets Association, a lobby group, organized the call.
The industry rhetoric was that the burden of filing the rules would cost investors. Some call participants said it would also create unnecessary delays that would make it more difficult for index funds to follow benchmarks or for stock selectors to take opportunistic bets.
The proposed rule comes from the Federal Trade Commission. This would require investment firms to file an antitrust review request whenever a manager’s collective funds exceed certain thresholds, which in some cases means more than 10% holdings in a firm. Currently, investment firms typically only need to alert regulators when a single fund takes a sufficiently large position in a company.
Government officials want to remove blind spots in the way they monitor the impact of influential investors on everyday consumers, as asset managers, hedge funds and private equity firms become growing forces important in the markets. Among the concerns of regulators – and why this falls under antitrust rules – is the possibility for these companies to exert anti-competitive pressure.