Colorado PERA recently submitted two comment letters to the Securities and Exchange Commission (SEC). Together, the letters argue for increased transparency in financial markets that would benefit PERA members and other investors alike.

The first letter, sent in late January and signed by PERA Chief Investment Officer AmyMcGarrity, called for the SEC to allow U.S. investment managers to separate payments for trade executions from investment research costs. This echoed previous PERA views on the most recent Markets in Financial Instruments Directive, or MiFID II, which has required asset managers in Europe to separate out the cost of research from the commissions paid to brokers for executing trades.

As discussed in a previous PERA on the Issues post, McGarrity has called for the SEC to increase pricing transparency by providing clear guidance that would allow U.S. investors to pay directly for research, rather than receiving research as part of a bundle of services paid for by commissions.

McGarrity noted concerns about the “bundling” of investment research with trading costs, which she had also expressed back in 2017. In her January 2019 letter, she wrote that “U.S. investors should not be at an unnecessary disadvantage relative to our European peers.” McGarrity’s actions on behalf of the investor community and the PERA membership were highlighted in a recent article in The Financial Times.

Read McGarrity’s letter.

Continuing the theme of pressing for more disclosure and transparency that benefits both investors and PERA stakeholders, PERA Executive Director Ron Baker joined three dozen public retirement system directors and chief investment officers in signing a letter to the SEC penned by the International Limited Partners Association (ILPA). The ILPA is an organization created “to enhance and improve investor reporting and transparency” for private equity investors and stakeholders.

In the ILPA letter to the SEC, institutional investors called for the SEC to clearly define the fiduciary protections investors require in the private equity market and outlined the actions the Commission should take to ensure investor confidence in the marketplace.

“Strong fiduciary duties are the foundation of the vibrant private markets in the United States,” the letter stated. “These duties of care, loyalty, and good faith foster the trust that give investors confidence to invest with fund managers,” the letter continued.

Read the ILPA letter.

PERA will continue to advocate for investor transparency by joining forces with other institutional investors and investment industry organizations for the benefit of its members and retirees.

For more details on PERA’s investment program, see A closer look at PERA’s investment expenses.