Monday, April 12, 2021
Allison Herren Lee, the Securities and Exchange Commission's acting chair, called for more disclosure and transparency about proxy voting by mutual funds and institutional investors to ensure they line up with shareholder sentiment, particularly environmental, social, and governance (ESG) issues.
In her remarks before the Investment Company Institute's annual Mutual Fund and Investment Management Conference on March 17, 2021, Lee said that the SEC's proxy voting "regulations haven't kept up with what is a new landscape of institutional investor-driven corporate governance." Consequently, she announced that the SEC would focus on strengthening shareholder democracy by updating its rules and guidance surrounding proxy voting and corporate governance — including clarifying the proxy voting responsibilities of investment advisers and making existing proxy reporting more accessible and understandable to the now more expansive universe of investors.
Categories: All, Cross-Post
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Saturday, April 3, 2021
Interest in ESG investing and the broader area of sustainable finance has exploded over the past few years. Both institutional and retail investors are clamoring for ESG investment options. According to one recent Morgan Stanley survey, 95% of millennials and 85% of all investors are now interested in sustainable investing strategies. Consequently, the highly competitive mutual fund industry has gone into overdrive, creating ESG mutual funds to attract these investors. Given the high demand and the growth of new mutual funds aimed at these ESG-conscious investors, it was only a matter of time before the regulators noticed. Over the past year, the SEC has been unfolding a larger plan to police and regulate sustainable and ESG finance.
Tuesday, March 30, 2021
Pressure is growing on industry and government to respond to 2021’s extreme stock market volatility. Following on the controversy around the GameStop retail buy-side suspensions, one of the remedies being discussed is shortening of the settlement cycle and, perhaps, even a shift to real-time settlement in the US equity markets. Yet the practicality of the situation is that most of the banks and dealers in the securities financing sector just can’t operate real-time in today's environment. The timeline for financing activity, which underpins much of the trading by professionals in today's markets, as well as the lending of securities by institutional investors, cannot easily be compressed. For that reason, equity financing's capabilities are prime considerations for any change in the market infrastructure. Yes, trades can be executed in real-time, but trades are not the same as loans.
Tags: T+1
Thursday, March 18, 2021
On February 4th, 2021, the Securities and Exchange Commission called for a “robust public discussion” about whether online brokers’ late January suspensions of retail trading should lead to changes in the market infrastructure. In the view of attorneys for the aggrieved retail traders, there will be a lot for the SEC to consider. More than 50 lawsuits have been filed as of today, creating another form of discussion. Our blog series on the potential infrastructure changes continues with a few of the likely discussion topics.
Categories: All, Formal Regulatory Remedies, Cross-Post
Thursday, March 11, 2021