Committee Releases Paper on Common Ownership and Anti-Trust

BOSTON, Nov. 16, 2017 /PRNewswire/ -- Today, the Committee on Capital Markets Regulation, which includes representation from the country's leading academics and largest banks, asset managers and hedge funds, is releasing a paper on common ownership of equities by institutional owners and the potential antitrust concerns associated with such ownership.

According to Hal S. Scott, director of the Committee and professor of international financial systems at Harvard Law School, "Recent economic research claims to show that when institutional investors own stock in multiple firms in an industry, antitrust concerns follow. We feel this conclusion is premature and not supported by the data. Our paper clarifies that, in fact, no compelling evidence exists linking institutional owners to anti-competitive behavior."

The Committee's paper focuses on the claims of three research papers that examine the airline industry, the banking industry, and executive compensation, each arguing that common ownership leads to anti-competitive behavior.

Overall, the Committee finds that this common ownership research reaches conclusions based on questionable research methodologies and that, given the concerns with the research design, the findings in the three papers are not robust to the critiques of other academics and are, therefore, largely inconclusive.

The Committee's paper also identifies the increasing number of academic studies that report results contradicting those found in the original three common ownership papers. This subsequent research collectively finds that no anti-competitive effects of common ownership can be found in the data.

According to Scott, "Potential responses to the alleged antitrust concerns could prove quite harmful to savers and retail investors, so it is vital that we be clear about what has and what has not been established in the research before any policy discussions ensue. At this stage, it would be premature to pursue any policy changes in the investment management industry based on the current economic research."

The full paper can be accessed at: http://www.capmktsreg.org/2017/11/15/common-ownership-and-antitrust-concerns/

Press inquiries may be directed to the Committee' Executive Director of Research, John Gulliver at: [email protected].

SOURCE Committee on Capital Markets Regulation

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http://www.capmktsreg.org