SEC Chair Highlights Asset Management Regulatory Developments

SEC Chair Gary Gensler outlined regulatory developments in the "asset management space."

In a speech before The Future of Asset Management North America Conference, he highlighted the following:

• Proxy Disclosures. Mr. Gensler described the SEC's proposal to increase proxy voting disclosures by registered funds.
• Digital Engagement Practices. Mr. Gensler noted that asset managers are using predictive data analytics and other digital engagement practices ("DEPs") to develop bespoke financial products and tailored marketing for individual investors. He also cited the increased use of predictive data analytics algorithms by robo-advisers and investment advisers. Mr. Gensler raised concerns about conflicts of interest that may arise regarding whether market participants are using DEPs to maximize returns for investors, or to maximize the revenues of their platforms.
• Private Funds and Money Market Funds. Mr. Gensler cited his request for SEC staff to provide for more robust reporting and disclosures through Form PF. He also emphasized that the SEC is focused on actions it can take to make money market funds and open-end funds "more resilient, learning from the COVID-related market events of 2020."
• Fund Naming. In response to funds branding themselves as "green" or "sustainable," Mr. Gensler reported that he requested that SEC staff prepare recommendations concerning "whether funds should disclose the criteria and underlying data they use to make these claims."
• Crypto Asset Exposure. Mr. Gensler raised concern that (i) more investment companies are providing investors with exposure to crypto assets and (ii) the SEC is beginning to receive and review filings for exchange-traded funds that intend to invest in Chicago Mercantile Exchange-traded bitcoin futures.

Primary Sources

1. SEC Speech, Gary Gensler: Prepared Remarks before The Future of Asset Management North America Conference