CalSTRS Praises Congressional Action on Financial Reform Legislation, Urges Swift Passage by House and Senate
Agreement affirms SEC authority to write rules giving shareholders proxy access.

News release

WEST SACRAMENTO, CA– The California State Teachers’ Retirement System (CalSTRS) today praised action by Senate and House negotiators to reach agreement on financial regulatory reform legislation. The full House and Senate are expected to act on the measure next week.

The bill is designed to close regulatory gaps to help avoid a repeat of the 2008 financial market crisis. It gives the SEC authority to write proxy access rules, but without imposing onerous ownership requirements that surfaced in last-minute amendments. As a result, large, long-term shareholders will have access to nominate directors of corporate boards, an issue championed by CalSTRS and other institutional investors.

“It has been a long process to get meaningful reforms in financial regulations but we succeeded in providing safeguards and access for shareholders, and addressed the practices that contributed to the global financial crisis,” said Anne Sheehan, corporate governance director at CalSTRS. “We appreciate the perseverance and tenacity of Congresswoman Maxine Waters (D-Los Angeles) and Congressman Barney Frank (D-Mass.) who helped ensure that corporate boards are focused on promoting the long-term interests of their business and investors.”

Other major provisions of the bill would curb propriety trading by the largest financial firms, give federal regulators new authority to seize and liquidate troubled financial firms without taxpayer bailouts and give shareholders of public corporations a non-binding vote on executive pay.

The California State Teachers´ Retirement System, with a portfolio valued at $132 billion, is the second largest public pension fund in the United States. It administers retirement, disability and survivor benefits for California’s 848,000 public school educators and their families from the state’s 1,400 school districts, county offices of education and community college districts.