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SEC proposes new disclosure requirements for investment funds and advisors

June 15, 2022
A. Deniz Altınay, Senior Partner, Pekin Bayar Mizrahi Galya Kohen Benbanaste, Counsel, Pekin Bayar Mizrahi
A. Deniz Altınay, Senior Partner, Pekin Bayar Mizrahi Galya Kohen Benbanaste, Counsel, Pekin Bayar Mizrahi
Posted in Energy Financial institutions Environmental, social and governance (ESG)

On May 25, 2022, US Securities and Exchange Commission ("SEC") proposed amendments to the rules in order to require investment funds and advisers to make more specific disclosures on their prospectuses, annual reports and adviser brochures based on their environmental, social and governance (ESG) strategies.  Through the proposed amendments, funds emphasizing a specific ESG impact of an investment or advisers marketing themselves as having an ESG focus will be obliged to make disclosures specifying the impact/practice and its progress.  Additionally, SEC's proposal requires funds and advisers to include certain ESG reporting in certain forms to be submitted to SEC. Through such proposed amendments, SEC aims to protect investors against greenwashing practices. New proposed rules will be open for public comment for 60 days upon its publication in the Federal Register.

 

It is possible to expect that other securities authorities globally may adopt similar measures to minimize greenwashing.