Recent policy proposals by legal scholars would expose institutional investors to potential antitrust liability for owning shares in multiple firms in a concentrated industry. The Committee has analyzed these proposals and their potential market implications.
The Committee finds that the proposals rely on over-inclusive and unstable measures to designate industries as concentrated. Moreover, if implemented, the proposals could result in the sale of stock worth over $4 trillion, or nearly 20% of the stock in the affected firms in the S&P 500, and could prevent investors from maximizing their risk-adjusted returns through diversification. In addition, the proposals’ safe harbors would pose immeasurable harm to effective corporate governance and disrupt the funding of U.S. businesses.
The Committee therefore strongly recommends that policymakers not adopt the proposals.
The Committee’s full analysis can be found here.