As somebody who really appreciates being able to own a ton of different companies in small amounts in my retirement account, I'm not sure if this is the right way to solve the problem.
Requiring full disclosure of all ownership stakes, traceable back to individuals, is probably a better route for this.
And it seems that there's a trend towards that, last company I registered had a new process for listing beneficial ownership of all significant amounts. Just need to push that legislation further.
You can do this but you should also relinquish all voting rights of said companies. When companies like Blackrock, State Street, Fidelity, Vanguard, etc all sit on the same boards, you're going to get decisions being forced that may not be good for the company, workers, customers, or country. Doubly so when they're sitting on two competing companies boards.
You can allow mutual funds or ETFs or whatever similar instrument, but they should not be allowed to have a vote or say in the company.
You could either make an exception for funds, or simply make them owned directly. Probably impossible before computerisation but fairly straightforward now.
The difficult problem is how you distinguish a fund for consumers versus the types of funds you want to disallow. Start trying to codify that in law and it will quickly bring people finding the edges for their own purposes.
Full public disclosure of all beneficial ownership in entities would go a lot further, IMHO.
Requiring full disclosure of all ownership stakes, traceable back to individuals, is probably a better route for this.
And it seems that there's a trend towards that, last company I registered had a new process for listing beneficial ownership of all significant amounts. Just need to push that legislation further.