To ensure the integrity of the label and the adequacy of the resulting disclosure for knowing what you own or are buying, the Transparency Label Initiativetm is paid for by the buy-side’s institutional investors including central banks and financial regulators. This allows the Transparency Label Initiativetm to avoid both the conflict of interest that would exist if it were paid for by issuers and the potential for capture by Wall Street.
Why would the buy-side’s institutional investors including central banks provide the funding for the Initiative? What mutual fund company wants to be known for blindly gambling with its clients’ money?
Why would central banks pay for the Initiative? What central bank has a mandate to blindly bet with taxpayer money when accepting collateral when the borrowing financial institution might not be able to repay its loan?
Why would financial regulators pay for the Initiative? What financial regulator doesn’t want to encourage the financial institutions they regulate to invest in transparent securities and transact through unrigged markets while discouraging blindly betting on opaque securities and transacting in rigged markets?
Having the institutional investors pay for the Transparency Label Initiativetm allows individual investors to benefit from and access label related information for a greatly reduce cost, most often free. If they want, individual investors can make a non-deductible donation to support the Transparency Label Initiativetm.