It is now prohibited for the New York State Common Retirement Fund (CRF) to enter into business with investment advisors who have made political contributions to the state’s comptroller or a candidate for state comptroller.
New York State Comptroller Thomas DiNapoli banned this practice, known as pay-to-play, in an executive order issued yesterday. Similarly, the Securities and Exchange Commission recently issued a proposal to ban the use of third-party placement agents by investment advisors.
“Pay-to-play has no place in the management of public pension funds,” DiNapoli said in a statement. “I’ve met with the chair of the SEC to urge the implementation of a national ban on pay-to-play political contributions, but we don’t have to wait for the SEC to finalize its proposed rule. We were ahead of the curve on banning placement agents. Now we’re ahead of the curve on ending pay-to-play. I’m exercising my power as the head of the Fund to eliminate pay-to-play right here, right now.”
The New York CRF has $116.5 billion in assets.
