The U.S. securities industry is applauding a new executive order from the White House, which calls for regulators to enable retirement accounts to hold a wider crop of alternative assets.
In a new order, U.S. president Trump called on the U.S. Department of Labor (DOL) to “clarify its position” on enabling investors with so-called 401(k) retirement savings accounts to hold a variety of alternative assets, including crypto investment funds, private equity and debt, commodities, infrastructure and real estate assets.
The order called on the DOL to propose rules to clarify the duties that fiduciaries have when providing access to funds that include alternative assets — with a view to curbing the legal and regulatory barriers that, “constrains fiduciaries’ ability to apply their best judgment in offering investment opportunities to relevant plan participants.”
It also calls for the U.S. Securities and Exchange Commission (SEC) to consider possible regulatory changes that it may have to make to facilitate access to alternatives in retirement accounts.
In a statement, industry trade group the U.S. Securities and Financial Markets Association (SIFMA), endorsed the initiative.
“Policy changes to expand access to private markets investments — appropriately tailored under ERISA and SEC rules — could serve to improve diversification, democratize access and offer more investment choices to the benefit of everyday retirement savers,” said Kenneth Bentsen, Jr., president and CEO of SIFMA, in a release.
Fund industry trade group the Investment Company Institute (ICI), also applauded the move.
“Retirement savers are the ultimate long-term investors and would benefit from the diversification offered by the inclusion of private assets. We look forward to working with the White House, Congress, the SEC and the Department of Labor as they work to expand access to everyday investors,” said ICI president and CEO, Eric Pan, in a statement.