• Resources
  • Blog
  • Journalists
  • Log In
  • Sign Up
  • Data Privacy
  • Send a Release
Cision PR Newswire: news distribution, targeting and monitoring home
  • News
  • Products
    • Overview
    • Distribution by PR Newswire
    • Cision Communications Cloud®
    • Cision IR
    • All Products
  • Contact
    • General Inquiries
    • Request a Demo
    • Editorial Bureaus
    • Partnerships
    • Media Inquiries
    • Worldwide Offices

 

When typing in this field, a list of search results will appear and be automatically updated as you type.

Searching for your content...

No results found. Please change your search terms and try again.
  • News in Focus
      • Browse News Releases
      • All News Releases
      • All Public Company
      • English-only
      • News Releases Overview
      • Multimedia Gallery
      • All Multimedia
      • All Photos
      • All Videos
      • Multimedia Gallery Overview
      • Trending Topics
      • All Trending Topics
  • Business & Money
      • Auto & Transportation
      • All Automotive & Transportation
      • Aerospace, Defense
      • Air Freight
      • Airlines & Aviation
      • Automotive
      • Maritime & Shipbuilding
      • Railroads and Intermodal Transportation
      • Supply Chain/Logistics
      • Transportation, Trucking & Railroad
      • Travel
      • Trucking and Road Transportation
      • Auto & Transportation Overview
      • Business Technology
      • All Business Technology
      • Blockchain
      • Broadcast Tech
      • Computer & Electronics
      • Computer Hardware
      • Computer Software
      • Data Analytics
      • Electronic Commerce
      • Electronic Components
      • Electronic Design Automation
      • Financial Technology
      • High Tech Security
      • Internet Technology
      • Nanotechnology
      • Networks
      • Peripherals
      • Semiconductors
      • Business Technology Overview
      • Entertain­ment & Media
      • All Entertain­ment & Media
      • Advertising
      • Art
      • Books
      • Entertainment
      • Film and Motion Picture
      • Magazines
      • Music
      • Publishing & Information Services
      • Radio & Podcast
      • Television
      • Entertain­ment & Media Overview
      • Financial Services & Investing
      • All Financial Services & Investing
      • Accounting News & Issues
      • Acquisitions, Mergers and Takeovers
      • Banking & Financial Services
      • Bankruptcy
      • Bond & Stock Ratings
      • Conference Call Announcements
      • Contracts
      • Cryptocurrency
      • Dividends
      • Earnings
      • Earnings Forecasts & Projections
      • Financing Agreements
      • Insurance
      • Investments Opinions
      • Joint Ventures
      • Mutual Funds
      • Private Placement
      • Real Estate
      • Restructuring & Recapitalization
      • Sales Reports
      • Shareholder Activism
      • Stock Offering
      • Stock Split
      • Venture Capital
      • Financial Services & Investing Overview
      • General Business
      • All General Business
      • Awards
      • Commercial Real Estate
      • Corporate Expansion
      • Earnings
      • Human Resource & Workforce Management
      • Licensing
      • New Products & Services
      • Obituaries
      • Outsourcing Businesses
      • Overseas Real Estate (non-US)
      • Personnel Announcements
      • Real Estate Transactions
      • Residential Real Estate
      • Small Business Services
      • Socially Responsible Investing
      • Surveys, Polls and Research
      • Trade Show News
      • General Business Overview
  • Science & Tech
      • Consumer Technology
      • All Consumer Technology
      • Artificial Intelligence
      • Blockchain
      • Cloud Computing/Internet of Things
      • Computer Electronics
      • Computer Hardware
      • Computer Software
      • Consumer Electronics
      • Cryptocurrency
      • Data Analytics
      • Electronic Commerce
      • Electronic Gaming
      • Financial Technology
      • Mobile Entertainment
      • Multimedia & Internet
      • Peripherals
      • Social Media
      • STEM (Science, Tech, Engineering, Math)
      • Supply Chain/Logistics
      • Wireless Communications
      • Consumer Technology Overview
      • Energy & Natural Resources
      • All Energy
      • Alternative Energies
      • Chemical
      • Electrical Utilities
      • Gas
      • General Manufacturing
      • Mining
      • Mining & Metals
      • Oil & Energy
      • Oil and Gas Discoveries
      • Utilities
      • Water Utilities
      • Energy & Natural Resources Overview
      • Environ­ment
      • All Environ­ment
      • Conservation & Recycling
      • Environmental Issues
      • Environmental Policy
      • Environmental Products & Services
      • Green Technology
      • Natural Disasters
      • Environ­ment Overview
      • Heavy Industry & Manufacturing
      • All Heavy Industry & Manufacturing
      • Aerospace & Defense
      • Agriculture
      • Chemical
      • Construction & Building
      • General Manufacturing
      • HVAC (Heating, Ventilation and Air-Conditioning)
      • Machinery
      • Machine Tools, Metalworking and Metallurgy
      • Mining
      • Mining & Metals
      • Paper, Forest Products & Containers
      • Precious Metals
      • Textiles
      • Tobacco
      • Heavy Industry & Manufacturing Overview
      • Telecomm­unications
      • All Telecomm­unications
      • Carriers and Services
      • Mobile Entertainment
      • Networks
      • Peripherals
      • Telecommunications Equipment
      • Telecommunications Industry
      • VoIP (Voice over Internet Protocol)
      • Wireless Communications
      • Telecomm­unications Overview
  • Lifestyle & Health
      • Consumer Products & Retail
      • All Consumer Products & Retail
      • Animals & Pets
      • Beers, Wines and Spirits
      • Beverages
      • Bridal Services
      • Cannabis
      • Cosmetics and Personal Care
      • Fashion
      • Food & Beverages
      • Furniture and Furnishings
      • Home Improvement
      • Household, Consumer & Cosmetics
      • Household Products
      • Jewelry
      • Non-Alcoholic Beverages
      • Office Products
      • Organic Food
      • Product Recalls
      • Restaurants
      • Retail
      • Supermarkets
      • Toys
      • Consumer Products & Retail Overview
      • Entertain­ment & Media
      • All Entertain­ment & Media
      • Advertising
      • Art
      • Books
      • Entertainment
      • Film and Motion Picture
      • Magazines
      • Music
      • Publishing & Information Services
      • Radio & Podcast
      • Television
      • Entertain­ment & Media Overview
      • Health
      • All Health
      • Biometrics
      • Biotechnology
      • Clinical Trials & Medical Discoveries
      • Dentistry
      • FDA Approval
      • Fitness/Wellness
      • Health Care & Hospitals
      • Health Insurance
      • Infection Control
      • International Medical Approval
      • Medical Equipment
      • Medical Pharmaceuticals
      • Mental Health
      • Pharmaceuticals
      • Supplementary Medicine
      • Health Overview
      • Sports
      • All Sports
      • General Sports
      • Outdoors, Camping & Hiking
      • Sporting Events
      • Sports Equipment & Accessories
      • Sports Overview
      • Travel
      • All Travel
      • Amusement Parks and Tourist Attractions
      • Gambling & Casinos
      • Hotels and Resorts
      • Leisure & Tourism
      • Outdoors, Camping & Hiking
      • Passenger Aviation
      • Travel Industry
      • Travel Overview
  • Policy & Public Interest
      • Policy & Public Interest
      • All Policy & Public Interest
      • Advocacy Group Opinion
      • Animal Welfare
      • Congressional & Presidential Campaigns
      • Corporate Social Responsibility
      • Domestic Policy
      • Economic News, Trends, Analysis
      • Education
      • Environmental
      • European Government
      • FDA Approval
      • Federal and State Legislation
      • Federal Executive Branch & Agency
      • Foreign Policy & International Affairs
      • Homeland Security
      • Labor & Union
      • Legal Issues
      • Natural Disasters
      • Not For Profit
      • Patent Law
      • Public Safety
      • Trade Policy
      • U.S. State Policy
      • Policy & Public Interest Overview
  • People & Culture
      • People & Culture
      • All People & Culture
      • Aboriginal, First Nations & Native American
      • African American
      • Asian American
      • Children
      • Diversity, Equity & Inclusion
      • Hispanic
      • Lesbian, Gay & Bisexual
      • Men's Interest
      • People with Disabilities
      • Religion
      • Senior Citizens
      • Veterans
      • Women
      • People & Culture Overview
      • In-Language News

      • español
      • português
      • Česko
      • Danmark
      • Deutschland
      • España
      • France
      • Italia
      • Nederland
      • Norge
      • Polska
      • Portugal
      • Россия
      • Slovensko
      • Suomi
      • Sverige
  • Overview
  • Distribution by PR Newswire
  • Cision Communications Cloud®
  • Cision IR
  • All Products
  • General Inquiries
  • Request a Demo
  • Editorial Bureaus
  • Partnerships
  • Media Inquiries
  • Worldwide Offices
  • PR Newswire: news distribution, targeting and monitoring
  • Send a Release
    • ALL CONTACT INFO
    • Contact Us

      888-776-0942
      from 8 AM - 10 PM ET

  • Send a Release
  • Sign Up
  • Log In
  • Resources
  • Blog
  • Journalists
  • RSS
  • GDPR
  • News in Focus
    • Browse All News
    • Multimedia Gallery
    • Trending Topics
    • Send a Release
    • Sign Up
    • Log In
    • Resources
    • Blog
    • Journalists
    • RSS
    • GDPR
  • Business & Money
    • Auto & Transportation
    • Business Technology
    • Entertain­ment & Media
    • Financial Services & Investing
    • General Business
    • Send a Release
    • Sign Up
    • Log In
    • Resources
    • Blog
    • Journalists
    • RSS
    • GDPR
  • Science & Tech
    • Consumer Technology
    • Energy & Natural Resources
    • Environ­ment
    • Heavy Industry & Manufacturing
    • Telecomm­unications
    • Send a Release
    • Sign Up
    • Log In
    • Resources
    • Blog
    • Journalists
    • RSS
    • GDPR
  • Lifestyle & Health
    • Consumer Products & Retail
    • Entertain­ment & Media
    • Health
    • Sports
    • Travel
    • Send a Release
    • Sign Up
    • Log In
    • Resources
    • Blog
    • Journalists
    • RSS
    • GDPR
  • Policy & Public Interest
    • Send a Release
    • Sign Up
    • Log In
    • Resources
    • Blog
    • Journalists
    • RSS
    • GDPR
  • People & Culture
    • People & Culture
    • Send a Release
    • Sign Up
    • Log In
    • Resources
    • Blog
    • Journalists
    • RSS
    • GDPR
  • Send a Release
  • Sign Up
  • Log In
  • Resources
  • Blog
  • Journalists
  • RSS
  • GDPR
  • Overview
  • Distribution by PR Newswire
  • Cision Communications Cloud®
  • Cision IR
  • All Products
  • Send a Release
  • Sign Up
  • Log In
  • Resources
  • Blog
  • Journalists
  • RSS
  • GDPR
  • General Inquiries
  • Request a Demo
  • Editorial Bureaus
  • Partnerships
  • Media Inquiries
  • Worldwide Offices
  • Send a Release
  • Sign Up
  • Log In
  • Resources
  • Blog
  • Journalists
  • RSS
  • GDPR

Morningstar Publishes Global Study of Regulation and Taxation in the Fund Industry, Finding Regulation to be Adequate, But Not Always Proactive

Morningstar logo (PRNewsFoto/Morningstar Research Inc.) (PRNewsfoto/Morningstar, Inc.)

News provided by

Morningstar, Inc.

Apr 27, 2020, 08:00 ET

Share this article

Share this article


The Netherlands, Sweden, and the United Kingdom earned Top grades in the second chapter of the Global Investor Experience Study; Australia, Canada, China, Japan, New Zealand, and the United States received Below Average grades

CHICAGO, April 27, 2020 /PRNewswire/ -- Morningstar, Inc. (Nasdaq: MORN), a leading provider of independent investment research, today published the second chapter of its biannual Global Investor Experience (GIE) report. The report, now in its sixth edition, assesses the experiences of mutual fund investors in 26 markets across North America, Europe, Asia, and Africa. The "Regulation and Taxation" chapter evaluates the regulatory and tax frameworks that mutual fund investors face, assigning grades of Top, Above Average, Average, Below Average, and Bottom to each market.

Exhibit 2 of the Global Investor Experience report on Regulation and Taxation shows the scorecard for the markets covered in the study.

Morningstar gave Top grades to the Netherlands, Sweden, and the U.K., denoting these as the most investor-friendly markets in terms of regulation and taxation. Conversely, Morningstar assigned Below Average grades to Australia, Canada, China, Japan, New Zealand, and the U.S., as fund markets where the regulatory and tax schemes need to improve. Morningstar did not assign a Bottom grade to any market, as every market in the study provides basic protections for investors.

"When it comes to regulation and taxation in the fund industry, we are looking for policy that ultimately empowers investor success, like tax incentives that encourage individual investment and effective regulation of funds that promotes transparency and limits misleading statements and conflicts of interest," said Aron Szapiro, head of policy research at Morningstar and a co-author of the study. "We found that regulators in the U.S. and Canada are generally running efficient systems. However, the pace of reform there hasn't kept up with the rest of the world, explaining why the U.S. and Canada continued to receive a Below Average grade for regulation and taxation in our study."

"Since our last report in 2017, the trend towards strong regulation that protects mutual fund investors has remained intact. We're seeing more markets take steps to motivate citizens of all backgrounds to invest for their futures through special tax incentives or regulations that encourage lower fees, like mandatory disclosures," said Andy Pettit, Morningstar's director of policy research, EMEA, and co-author of the study.

The second chapter on Regulation and Taxation is available here. Highlights include:

  • The Netherlands, Sweden, and the U.K. earned top grades in part because they provide strong incentives for ordinary people to invest, although none of the countries offer the overall best tax systems for ordinary investors. The U.K. continued the expansion of its auto-enrollment program and together with the Netherlands stood out for banning embedded commissions on most sales, and Sweden stood out for having strong governance and being a frontrunner in ESG disclosures.
  • Every European country covered by the MiFID II regulations earned at least an average grade as the regulation spurred needed reforms in areas like soft dollar commissions and increased transparency. 
  • Australia, Canada, New Zealand, and the United States lagged other markets, as they have in previous studies. These countries have adequate regulation around mutual fund operations and distribution, meeting basic standards, and the experience for investors can be quite good. Despite that, they fall short of the standard set by other markets that govern conflicts of interest and incentivize investing. In addition, Australia, Canada, and the U.S. all lag on tax policy compared with other markets in the study, creating distortions and disincentives to invest.
  • Japan fell to Below Average despite making some positive strides. Japan fell to Below Average from Average mainly due to Morningstar's revised methodology putting more emphasis on mutual fund operations and distribution policies, an area where other markets have taken major steps to shore up their regulations in recent years. Japan doesn't mandate disclosure of third-party research costs or distribution costs paid out of fund assets, and there is no requirement to disclose advisors' or distributors' conflicts of interests.
  • China falls short in encouraging people to save for retirement and opening fund markets to promote greater choice. China only has a state-managed pension scheme and no other mandated supplementary defined contribution system. Additionally, the regulation of third-party research cost disclosure and soft dollars is weak. Although China has made efforts to further open up its capital market, fund choices are mostly limited to locally domiciled funds.
  • ETFs' continued growth has given investors more choice in most markets, though distributors still have more incentive to offer open-end funds in some markets. In addition, the tax treatment of ETFs can vary. For example, in the U.S., the choice is distorted by differing tax treatments that are advantageous to ETFs, while, in New Zealand, ETFs are tax-disadvantageous for lower earners.
  • While funds in many markets continue to levy distribution fees through a fund's expense ratio, there have been some positive steps to reduce this practice. For instance, commissions have been banned in Australia, the Netherlands, and the U.K. In Hong Kong, intermediaries that receive monetary or nonmonetary benefits from fund issuers can no longer refer to themselves as independent.
  • Of the 26 markets, only Singapore and Hong Kong do not tax fund investors at all. Many markets exempt fund investors from capital gains while they hold a fund but tax at least some of the fund's income. The U.S. and Australia are notable exceptions where taxes are due on capital gains incurred by the fund, regardless of whether an investor has sold the fund or not.

Methodology
The GIE study reflects Morningstar's views about what makes a good experience for fund investors. This study primarily considers publicly available open-end funds and exchange-traded funds, both of which are typical ways that ordinary people invest in pooled vehicles. As in previous editions, for this chapter of the GIE study, Morningstar evaluated markets based on four key categories: policy and tax encouragements that incentivize individuals to invest for their futures, regulatory requirements for operations and distribution, governance, and regulatory structure.

The methodology change that assigned more weight to regulation of fund operations and distribution contributed to a greater mix of higher and lower grades around the Average grade than previously and helps identify markets that, in Morningstar's opinion, are adopting best practices and those that need to improve.

This chapter follows the Fees and Expenses chapter that Morningstar published in September 2019. Morningstar expects to publish the study's other chapters later this year.

About Morningstar, Inc.

Morningstar, Inc. is a leading provider of independent investment research in North America, Europe, Australia, and Asia. The Company offers an extensive line of products and services for individual investors, financial advisors, asset managers, retirement plan providers and sponsors, and institutional investors in the debt and private capital markets. Morningstar provides data and research insights on a wide range of investment offerings, including managed investment products, publicly listed companies, private capital markets, debt securities, and real-time global market data. Morningstar also offers investment management services through its investment advisory subsidiaries, with approximately $233 billion in assets under advisement and management as of Dec. 31, 2019. The Company has operations in 27 countries. For more information, visit www.morningstar.com/company. Follow Morningstar on Twitter @MorningstarInc.

Morningstar's Manager Research Group consists of various wholly owned subsidiaries of Morningstar, Inc. including, but not limited to, Morningstar Research Services LLC. The grades assigned for each market are derived from a qualitative assessment process performed by manager research analysts. The grades referenced in this release and report are assessments, thus are statements of opinions and are not to be considered as guarantees. This press release and the Global Fund Investor Experience report is for informational purposes only.

©2020 Morningstar, Inc. All Rights Reserved.

MORN-R

Media Contact:
Rebecca Rogalski, +1 312 244-7771 or [email protected]

SOURCE Morningstar, Inc.

Related Links

http://www.morningstar.com

Modal title

Also from this source

Morningstar, Inc. to Announce First-Quarter 2021 Financial...

Morningstar, Inc. to Announce First-Quarter 2021 Financial...


Morningstar Report Finds that Retirement Savers' Contributions...

Morningstar Report Finds that Retirement Savers' Contributions...

Explore

More news releases in similar topics

  • Banking & Financial Services
  • Surveys, Polls and Research

    Contact Cision

  • Cision Distribution 888-776-0942
    from 8 AM - 9 PM ET

  • Chat with an Expert
    • General Inquiries
    • Request a Demo
    • Editorial Bureaus
    • Partnerships
    • Media Inquiries
    • Worldwide Offices

    Products

  • Cision Communication Cloud®
  • For Marketers
  • For Public Relations
  • For IR & Compliance
  • For Agency
  • For Small Business
  • All Products

    About

  • About PR Newswire
  • About Cision
  • Become a Publishing Partner
  • Become a Channel Partner
  • Careers
  • COVID-19 Resources
  • Accessibility Statement

    • Asia
    • Brazil
    • Canada
    • Czech
    • Denmark
    • Finland
    • France
    • Germany
    • India
    • Israel
    • Italy
    • Mexico
    • Middle East
    • Netherlands
    • Norway
    • Poland
    • Portugal
    • Russia
    • Slovakia
    • Spain
    • Sweden
    • United Kingdom

    My Services

  • All New Releases
  • Online Member Center
  • ProfNet

Contact Cision

Products

About

My Services
  • All News Releases
  • Online Member Center
  • ProfNet
Cision Distribution Helpline
888-776-0942
  • Terms of Use
  • Privacy Policy
  • Information Security Policy
  • Site Map
  • RSS
  • Cookie Settings
Copyright © 2021 Cision US Inc.