The California Public Employees' Retirement System (CalPERS), together with ten other large pension funds from the US, Europe and Australia, have sent a letter of support to the chairman of the Securities and Exchange Commision (SEC), Mary Schapiro. The funds urge SEC to continue to push for market reform in the US in order to protect investors and maintain investor confidence.

The schemes, which together represent over $1.6trn in assets under management, feel promised reforms have not gone far or fast enough and have specifically pressed the SEC on two issues. The first is to adopt rules on executive pay and the second, to renew rules regarding universal proxy access, which would allow investors to have more say over the composition and compensation of company boards.

The letter said the group stands ready to help the SEC "combat efforts to weaken or roll back the important investor protection provisions of Dodd-Frank (the US Act that puts regulation of the financial industry under government control)."

"Despite the enactment of the Dodd-Frank, we believe there is unfinished business that is critical to protecting and strengthening shareowner rights and investor confidence in the financial markets," the letter reads.

CalPERS and the other funds - which include the Universities Superannuation Scheme (USS) with assets worth over £32bn, and the BT Pension Scheme which is worth £36bn according to data held by Pension Funds Online - list a set of six financial market reform priorities they feel that the SEC should complete.

The priorities, entitled 'An Investor's Framework for the Future: Financial Market Reform Priorities for the SEC', include:

- The revival of an Investor Advisory Committee, which is to serve as a source of information and recommendations to the SEC regarding its regulatory programs from the point of view of investors.

- Install universal proxy access

- Create clear rules on executive compensation

- Continuing work on international financial reporting standards.

- Work with credit rating agencies in order to provide an accountable and transparent ratings system with full disclosure on data and models used to develop ratings. .

- More rules on sustainability and board diversity disclosure

The letter was signed by AustralianSuper, the All Pensions Group (APG), BT Pension Scheme, CalPERS, CalSTRS, the Connecticut Retirement Plans and Trust Funds, the Florida State Board of Administration, the Ohio Public Employees' Retirement System, PGGM and the USS.

Four large investors; RPMI Railpen, Co-operative Asset Management, F&C Management and the Office of New York City Comptroller also signed the call for action.

CalPERS, the main signee of the letter, as well as CalSTRS (the California State Teachers' Retirement System) are pioneers when it comes to shareholder activism.

The public employee scheme announced last week it is seeking support for a longstanding proposal to get Apple Inc to require a majority vote before electing new candidates to its board.

During the same week the teachers' scheme also published a letter. The content revealed concernsregarding the diversity of Facebook's board of directors and asked its CEO Mark Zuckerberg for more women to be placed on the board.

CalSTRS and CalPERS both pioneer a strategy for diversity on corporate boards that incorporates the use of the Diverse Director DataSource, or 3D. It is a resource corporate leaders, such as those at Facebook, can use to find qualified and diverse board candidates.

azeevalkink@wilmington.co.uk

First published 15.02.2012