24/02/2010
Author: Kapila Gohel
Third-party bill favours light-touch
So much for third-party marketing scandals. Pensions caught in the headlights of the pay-to-play scandal probably feared the worst when regulatory overhaul and pension investment reform were
promised.
New Mexico’s Senate didn’t disappoint, but when legislation was passed late last week, in the shape of Senate Bill 18, designed to change the way the state’s investment agencies
make decisions, there were two sizeable exemptions: the Public Employees Retirement System (Pera) and the Educational Retirement Board (ERB).
However there is no sign of subterfuge, their exemption from the bill can only be seen as good news for all concerned, since it implies pension funds such as Pera and ERB already have the board
infrastructure in place to avoid such scandals.
“They were already doing most of what the bill required by rule and not by statute,” said Democratic Senator for New Mexico, Tim Keller, who sponsored the bill, which stipulates all
public members have at least 10 years’ investment and finance experience.
Third-party marketing is next on Keller’s list: “They are part of the business but we need to find a way to differentiate between legitimate and non-legitimate advisory services.”
His comments arrived days after New York City Comptroller John Liu proposed a partial lifting of its ban on placement agents.
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