An industry trade group for mutual fund companies, says it would be too burdensome for mutual fund companies to disclose how they voted when they cast votes for their investment clients in shareholder decisions. Until now, mutual fund companies have kept their voting records secret. The Investment Company Institute (ICI) is asking the Office of Management and Budget to overturn a decision by the Securities and Exchange Commission (SEC) to require public disclosure of proxy voting records. (See “Ray of Sunshine at SEC?" in the February 10, 2003, issue of the Watcher).


The rule would require funds to develop policies and procedures that identify how the fund makes its proxy voting decisions and disclose those policies and procedures to clients. Those disclosures must also include a description of the procedures for handling “material conflicts of interest” that arise between the interests of the fund and its clients.

In the wake of the Enron, WorldComm and other scandals that have made the public eye the corporate world with suspicion, the SEC has focused on disclosure and the public's right to know as a key tool to create financial accountability in the corporate world.

ICI argues that the SEC requirements, as written, are overly burdensome and is appealing to OMB to reject the disclosure requirements under OMB's authority under the Paperwork Reduction Act (PRA). Industry groups have a long history of using the PRA as a tool to oppose public disclosure requirements designed to protect the environment and ensure consumer safety.