Aug 30, 2016
For many industries, information flow has seen a remarkable transformation from paper media to digital in order to save time, space and money. Not to mention digital media tends to be more organised than paper-based information. Paper companies have not backed down to the industry threat, however.
The paper industry’s activism in the mutual fund space
“When the government planned to make it easier for mutual funds to quit mailing investors billions of pages of reports each year, the paper industry got involved,” says Andrew Ackerman of the Wall Street Journal.
According to the WSJ writer, American Mutual funds spend over $300-million every year for paper in order to send investors hundreds of millions of reports every year. Many of these densely written packets are tossed out and unread.
Last year, in order to save time and money, Securities Exchange Commission regulators began proposing a digital solution, not requiring funds to send hard copy reports to their investors. As part of the justification, only “24.5 percent said they would request a mailed hard copy” if the switch occurred according to the WSJ.
The paper industry strikes back
“The push for “logical progress,” however, was not progress to everyone, as the American Forest & Paper Association and the Envelope Manufactures Association teamed up to stop the proposal, added Ackerman.
The two paper groups jointly funded the Consumers for Paper Options group while rallying retirees and consumer groups “decrying what they call the government’s rush to digitalise,” says Ackerman.
“Millions of our fellow Americans will be left out in an information desert,” Rep. Bruce Poliquin, a Maine Republican leading the pro-paper faction, warned on the House floor July 6, according to WSJ.
In the end, the paper industry’s activism prevailed and the chairman of the SEC commission, Jo White, decided to drop the plan. White noted the plan had drawn “considerable attention,” and planned on a formal announcement this autumn, says Ackerman.
By Andrew Efimoff for www.benzinga.com