In remarks at the 2026 Investment Company Institute Investment Management Conference, U.S. Securities and Exchange Commission Commissioner Hester M. Peirce set out her view that investment company regulation should be calibrated to identified problems, attentive to investor and industry feedback, and more explicit about costs borne by fund shareholders. She highlighted fund proxy voting mechanics and the default use of paper disclosures as areas where current requirements impose high costs without clear investor benefits. Peirce focused on the long-standing difficulty of meeting the Investment Company Act voting threshold for certain actions, including changes to fundamental investment policies, certain agreements, 12b-1 plans, and mergers of affiliated funds, given low retail voting participation and intermediated ownership. Citing Investment Company Institute estimates, she put total costs for fund proxy campaigns since 2020 at USD 675 million to USD 1.14 billion and outlined potential approaches including lowering the quorum and raising the affirmative vote requirement, replacing the shareholder vote with alternatives such as board approval or advance notice for some matters, and adopting a voluntary standing-proxy model for retail investors similar to an Exxon Mobil program that received a Division of Corporation Finance no-action letter. On disclosures, she argued that paper as the default is costly and outdated, pointing to an estimate of USD 600 million to USD 822 million in annual fund printing and mailing costs, and suggested a proposal to make electronic delivery the default or to allow firms to choose delivery formats, alongside addressing intermediary fees associated with suppressing paper delivery.
U.S. Securities & Exchange Commission 2026-03-24
U.S. Securities and Exchange Commission Commissioner Peirce urges reforms to fund proxy voting quorums and electronic delivery
U.S. Securities and Exchange Commission Commissioner Hester M. Peirce, at the 2026 Investment Company Institute Investment Management Conference, advocated for problem-focused, cost-transparent investment company regulation. She criticized current proxy voting mechanics and paper disclosure requirements for high costs without clear benefits, citing significant expenses in fund proxy campaigns and annual printing. Peirce proposed alternatives like lowering voting thresholds, adopting electronic disclosures, and exploring new voting models to reduce costs and improve efficiency.