Commentary

Anne Plested
Traders Magazine Online News

Bottlenecks Ahead

Anne Plested, head of Fidessa's EU Regulation Change programme, has written a short blog arguing that although we should be thankful that ESMA have taken a pragmatic approach to moving things along, more bottlenecks could appear in the future.

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March 1, 2003

Oxley Has His Eyes on Soft Dollars: Lawmaker on Campaign to Defend Investors' Interests

By Gregory Bresiger

Soft dollar arrangements are legal, but they may be in trouble. A key lawmaker wants some answers about how they work and whether they hurt the average investor.

House Financial Services Chairman Michael Oxley (R-Ohio), examining the trading patterns of some mutual funds, is questioning if they are obtaining the best returns.

Oxley, in a recent speech to a conservative think tank, pointed to soft dollar research commitments tied to trading volume. That practice, he noted, "may interfere with best execution." And not obtaining best execution, Oxley added, raises "questions about soft-dollar arrangements and their effect on investor returns."

Oxley's committee is holding a hearing on the mutual fund industry, noted a spokeswoman for the committee. This comes as Oxley and another Congressional leader, Richard Baker (R-La), chairman of the House Subcommittee on Capital Markets, are calling for a study on mutual fund pricing and disclosure of costs. "I feel strongly about the need for transparency and disclosure," Oxley said.