On Monday July, 29, MFA and AIMA submitted a joint letter in response to ESMA’s consultation paper on short-termism. The letter responds to a number of assumptions in the consultation paper, and explains that it is important that more research is conducted on properly identifying short-termist behavior, documenting its causes, and understanding its consequences for the economy. The letter describes the value to capital markets of a mix of investors with long-term and short-term time horizons, and cites to data showing it may be difficult to draw meaningful conclusions as to the effect of market forces on the overall behavior of economies at large. In addition, the letter responds to specific areas in the consultation relevant to the industry, including investment strategies, environment, social and governance (ESG) disclosures, institutional investor engagement, remuneration of asset managers, and the use of credit default swaps by investment funds. The letter addresses each of these issues in the context of short-termism, and points out that many features of capital markets, such as providing transparency, discipline and liquidity, are the source of greater economic dynamism and sustainability as compared to other economic models.