General Counsel’s Address, 2026 Investment Management Conference
General Counsel’s Address
Paul G. Cellupica
General Counsel
Investment Company Institute
Investment Management Conference
Palm Desert, California
March 23rd, 2026
Good morning. On behalf of the Investment Company Institute, it’s my pleasure to welcome you to this year’s Investment Management Conference. We’re glad you’re here, and we’re grateful for your continued support.
We have a really stellar line-up of speakers and panels, and as in the past we’ve also reserved some time for networking and fun. It’s a little hotter than usual outside, but if you’re visiting from the Northeast like me, just think back to the six weeks of crusted snow and ice we had in January and February and you will enjoy it.
This is the second time I’ve been asked to give these opening remarks. Last year, I spoke about ICI’s vision of strengthening the financial well-being of everyday Americans by expanding their access to long-term investing. And even before the new administration began, we had already shared an actionable plan to modernize investing. When I spoke last year I described that plan, which resulted from our comprehensive review of the regulatory framework for funds under the Investment Company Act of 1940, and several of our priorities for improvement.
Now, twelve months later, I’m pleased to report that we have made enormous progress on those priorities. The SEC and other regulators have implemented a number of reforms recommended by ICI that strengthen your ability to serve investors. But we aren’t close to finished. We’re pushing forward on numerous fronts, and in the days ahead, we expect even more accomplishments.
I’ll dive into the details in a moment, but first, I want to highlight the work you and your firms have done to lift up investors and make our capital markets work for everyone.
Thanks to you, three out of every four households in America are actively saving for retirement.
Thanks to you, Americans now have total retirement assets of more than $48 trillion.
And thanks to you, a record number of Americans are 401(k) millionaires, and even more are millionaires when you factor in IRAs.
In short, everyday Americans are achieving a level of long-term financial security that seemed impossible 50 years ago.
No one knows these facts better than you. But much of the country doesn’t fully appreciate how much you do and why it matters, including many of our leaders in Washington, D.C. That’s why, at ICI, a large part of our job is telling your story. As many of you hopefully saw, ICI is partnering with the America250 initiative to show how regulated funds have helped build America’s economy—and how our industry remains deeply invested in its future.
And the figures I just listed are at the heart of our message to policymakers. When we go to meetings at the White House, or Congress, or the Department of Labor or the SEC, we tell your story of financial empowerment for everyday people.
But we don’t just talk about what you’ve done. We talk about what you’re ready to do, with the right reforms. You’re prepared to give the next generation of Americans an even brighter financial future.
I’ll now give you a progress report on several of the priority areas that I identified in my remarks last year, and also discuss where there is more work to do.
First, we’ve pushed for ETF innovation, starting with allowing funds the flexibility to offer both mutual fund and ETF share classes. Dual share classes increase choices for investors, promote tax efficiency, and provide economies of scale, thereby reducing costs.
We made this case to the SEC—and they listened. Last year at this conference, Acting Chairman Mark Uyeda vowed to act on the numerous applications for ETF share class relief. Since then, starting in November, the SEC has approved 48 such applications. And just last week, the ICI obtained landmark no-action and exemptive relief under the Securities Exchange Act that will enable ETF share classes of mutual funds to begin trading on exchanges. While much work and coordination with intermediaries remains before ETF share classes become widespread, the industry has taken the first steps and I predict there will be no turning back.
But the story doesn’t end there.
We can build on the SEC’s progress in advancing mutual fund investors’ access to the tax efficiencies of ETFs. It’s punitive and unfair that under current tax laws, mutual fund owners often must pay capital gains taxes long before they sell their shares. Millions of investors are losing potential returns on their investments because taxes on mutual funds penalize them even if they don’t sell a single share.
Investors are losing up to 13.4% in returns on an investment over a 10-year period, depending on the type of mutual fund, according to our research.
Fortunately, there is a solution. We’ve worked with both parties in Congress, and last year, members of the House and Senate introduced the GROWTH Act. If enacted, the bill will equalize tax treatment across mutual funds and ETFs, and encourage even more long-term investing in funds. Passage of the GROWTH Act is one of ICI’s top priorities, and we’re grateful that both Republicans and Democrats want to help more investors save for the future.
The SEC’s action on ETF share classes represents landmark progress for investors. But I have more good news to report. Another of ICI’s priorities for modernization was giving retail investors more access to private markets within regulated funds, and here as well, we have seen historic progress.
Since I last spoke, the SEC has acted on two of our main recommendations regarding retail access. Last April, the Commission issued exemptive relief providing more flexible conditions for co-investment by closed-end funds and business development companies alongside private funds. The relief reflects ICI’s call for a principles-based co-investment framework, and it has opened the door a bit wider for ordinary investors to invest in funds that provide access to private markets.
A month later, the SEC eliminated the long-standing 15% limit on retail fund investment in private funds. This will further enable middle class investors to access private markets strategies through regulated funds, like interval and tender offer funds.
The common thread through these and other actions we are advocating is reliance on the strong protections of the 1940 Act. Private markets come with risk, and investors deserve the strongest guardrails. For retail investors outside retirement plans, funds regulated under the 1940 Act are the best option. They provide diversification across issuers, industry sectors and types of credit risk, and they are managed by an adviser and overseen by a board that each have fiduciary duties to their investors. Further, investors in regulated funds benefit from the robust valuation framework under the 1940 Act, and requirements to disclose clearly and in detail the costs, principal risks, policies regarding redemptions, and other integral features of these funds.
We’re grateful the SEC has worked with us to promote the goal of responsible retailization. And we’re also partnering with other agencies to foster progress. President Trump last summer signed an executive order on expanding access to private markets in defined contribution plans, and we expect the Department of Labor will soon begin to implement this vision with a landmark rule proposal.
While we don’t know the final details yet, we hope that the proposal will provide a clearer pathway for plan sponsors to include private market assets as a portion of a vehicle like a target-date fund or CIT that provides access to a diversified range of asset classes. The proposal should describe the process that plan sponsors should follow, rather than endorse specific types of investments. And it should recognize that in evaluating an investment, fiduciaries need to consider all relevant factors, including risk-adjusted returns, rather than only focusing on cost. Experience has shown that investment accounts with diversification across asset classes produce better net returns over the long term.
We’ve shared our views with the Department, and we are hopeful that their proposal will open the door for greater diversification, and ultimately better returns, for all Americans preparing for retirement. It will take time to finalize and implement such a major rulemaking, but ICI will be involved at every step.
The third and last priority I’ll mention from our 1940 Act modernization review relates to the removal of unnecessary regulatory costs and burdens. Here, again, the SEC has made commendable progress. For example, the Commission recently proposed returning required public disclosure of a fund’s portfolio holdings to a quarterly basis rather than monthly. In addition, the SEC also proposed welcome changes to Form N-PORT that would reduce the compliance burdens of its Fund Names Rule.
Notwithstanding these positive steps, there are many other significant reforms that the SEC can and should undertake to remove unnecessary costs. One huge reform we hope to see is making e-delivery the default option for fund documents. It just makes sense given that investors communicate digitally with their service providers in all other aspects of their lives, and it would produce immediate and substantial benefits.
Nearly nine out of ten investors – including senior investors - support making e-delivery the default, as long as they can still request a paper copy if they choose.
Last month, Chairman Atkins announced that he has directed staff to work on this issue. We look forward to seeing the results of that effort.
In addition to e-delivery, the SEC should take steps to reform the proxy process for funds. Funds have higher quorum requirements than public companies for many matters, but the the fact that retail shareholders are so dispersed makes it challenging to reach that quorum, even for non-contested matters. Often, this means funds have to make repeated solicitations to the same shareholders. As one of our members put it, “We’re spending a lot of money to irritate our own shareholders.” ICI recently issued a white paper describing these challenges and the enormous costs they impose, as well as suggesting some possible solutions.
One good idea that we have endorsed is to allow shareholders to provide standing voting instructions to vote in line with the recommendations of the fund’s board, either in every vote or with certain exceptions, like mergers or increases in advisory fees. The SEC staff has provided similar no-action relief for these types of standing voting instructions to public companies, beginning with Exxon-Mobil, and there is no good legal or policy reason why funds shouldn’t be allowed to give their shareholders these same choices.
Changes like this will reduce the need for funds to send multiple solicitations that so many shareholders dislike, and will make it easier for funds to take actions that are in shareholders’ interests.
Finally, ICI continues to call for the restoration of the ability of affiliated funds to cross-trade fixed income securities. Cross-trading can significantly reduce transaction costs and enhance investors’ returns . In 2020 alone, cross-trades in fixed-income securities saved funds and their investors almost $330 million. Thankfully, we understand that the SEC is working on a proposal to allow funds to resume fixed-income cross-trading, with modernized conditions and oversight requirements that will reflect the realities of today’s markets.
Longer term, we want to move investing fully into the 21st Century, so investors can make the most of new technology, including developments such as AI and tokenization. We’ll work toward that vision in the year ahead. While elections may change the leaders in D.C., our principles endure and will always guide our efforts.
At ICI, we will continue to tell your story and support your success. We’re glad to do this, because the asset management industry succeeds by helping others succeed. I speak for the entire team at ICI when I say it’s an honor to serve you in our nation’s capital. We’re thankful for your partnership and your leadership.
It is now my great pleasure to introduce Brian Daly, Director of the SEC’s Division of Investment Management since July 2025. Brian brings to his role decades of experience across private practice and the investment management industry.
Most recently, he was a partner in the investment management practice at Akin Gump in New York, where he advised clients on legal and compliance programs and fund and management company formation, among other matters. Prior to that, he spent nearly a decade as a partner in the investment management practice at Schulte Roth & Zabel.
Brian also has significant in-house experience, having served in senior legal, compliance, and business roles at a number of leading asset managers. He has taught legal ethics at Yale Law School. Brian earned his law degree, with distinction, from Stanford Law School, and he has also earned degrees from Catholic University and the University of Hawaii.
We are thrilled to have Brian join us today. Please join me in welcoming IM Director Brian Daly.