Antitrust Aggregation Rules

The Hart-Scott-Rodino Antitrust Improvements Act of 1976 requires companies to file pre-merger notifications with the Federal Trade Commission and the Antitrust Division of the Justice Department for certain acquisitions.

Under current law, each individual mutual fund that owned more than 5% had to file. The FTC and DOJ have published proposed changes to the rules and interpretations implementing the Act; if the proposals are implemented, asset managers will be required to aggregate positions in an issuer across all funds when assessing filing thresholds.

SIFMA’s Asset Management Group has outlined significant concerns with the proposed aggregation requirement and the incorporation of the academic theory of common ownership, which asserts that the mere ownership of shares of competitor companies harms competition. The proposed aggregation rule would significantly increase the number of filings within the asset management industry. The filing fees and delay on investors’ acquisitions of securities would impair market efficiency and needlessly increase costs for retail investors, especially savers and retirees whose investments are their main source of income.

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