[Congressional Record Volume 150, Number 66 (Wednesday, May 12, 2004)]
[Senate]
[Page S5367]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                     MUTUAL FUND REFORM ACT OF 2004

  Mr. McCAIN. Mr. President, I am pleased to join my colleague from 
Illinois, Senator Fitzgerald, and several other members of the Senate 
in sponsoring S. 2059, the Mutual Fund Reform Act of 2004.
  Mutual funds traditionally have been seen as safe havens for long-
term investments. This perception of mutual funds as secure investment 
vehicles has certainly contributed to the industry's grow. Two decades 
ago, the mutual fund industry was relatively small; only a small 
percentage of Americans invested in mutual funds, and the assets of the 
industry were $115 billion. Today, the mutual fund industry has $7.5 
trillion in assets, over 90 million investors, and more than 10,000 
funds.
  Unfortunately, as the industry has grown, some mutual fund managers 
and boards of directors have ignored their most basic role as 
fiduciaries. Recent State and Federal investigations have revealed 
trading irregularities at several of funds, including many that are 
well known. These scandals have shed light on the disregard shown by 
many mutual fund managers and directors for the individuals who invest 
their hard-earned money in mutual funds. They have also drawn attention 
to inflated mutual fund fees that often are not in the best interests 
of mutual fund shareholders and too frequently are not properly 
disclosed to such shareholders.
  The Mutual Fund Reform Act would improve the integrity of the mutual 
fund industry by restoring investors' trust in the mutual fund managers 
and boards that are responsible for investing much of our citizens' 
household, college, and retirement savings. Most importantly, the act 
would strengthen the governance of mutual funds by, among other things, 
ensuring that mutual fund company boards would be truly independent and 
empowered. In addition, the act would establish disclosure requirements 
designed to provide mutual fund investors with a clearer picture of 
fund management and fund fees.
  I thank Senator Fitzgerald for introducing this important bill, and I 
urge my colleagues to support this legislation in order to further 
encourage investor confidence in the mutual fund industry and in our 
capital markets.

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