Advisers by Another Name

49 Pages Posted: 20 Jan 2021

See all articles by Paul G. Mahoney

Paul G. Mahoney

University of Virginia School of Law

Adriana Robertson

University of Chicago Law School; European Corporate Governance Institute (ECGI)

Date Written: January 15, 2021


The rise of index funds has reshaped the modern American capital markets. Like mutual fund managers, indices now direct trillions of dollars of investor capital. Although it regulates mutual fund managers as investment advisers, the SEC has chosen not to treat the providers of market indices similarly.

In this Article, we argue that many index providers are not merely like investment advisers; under the relevant statutory and regulatory regimes, they are investment advisers. The SEC’s failure to recognize this fact reflects an inaccurate and antiquated view of the index fund market.

Having established that certain index providers are presently acting as unregulated investment advisers, we propose a regulatory solution. The SEC should create a nonexclusive, conditional safe harbor giving index providers guidance on what activities will and will not make them investment advisers. This would close the regulatory gap in a way that is consistent with the governing statutes and case law without unduly burdening market participants.

Keywords: Index funds, passive investment, mutual funds, Investment Advisers Act, Investment Company Act

Suggested Citation

Mahoney, Paul G. and Robertson, Adriana, Advisers by Another Name (January 15, 2021). Virginia Law and Economics Research Paper No. 2021-01, Available at SSRN:

Paul G. Mahoney (Contact Author)

University of Virginia School of Law ( email )

580 Massie Road
Charlottesville, VA 22903
United States
434-924-7121 (Phone)
434-924-7536 (Fax)

Adriana Robertson

University of Chicago Law School ( email )

1111 E. 60th St.
Chicago, IL 60637
United States

European Corporate Governance Institute (ECGI) ( email )

c/o the Royal Academies of Belgium
Rue Ducale 1 Hertogsstraat
1000 Brussels

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