IAA Voices Strong Support for Legislation to Collect Data on Diversity, Equity and Inclusion
Recognizing that the investment adviser profession “has a long way to go in matters of diversity, equity, and inclusion,” the IAA has voiced its strong support for the Diversity and Inclusion Data Accountability and Transparency Act, which was favorably reported out of the. House Financial Services Committee on April 20.
In a letter to Committee Chair Maxine Waters (D-Calif) and Ranking Member Patrick McHenry (R-NC), IAA President and CEO Karen Barr said the investment adviser community “must address the issues that have resulted in lack of diversity and must make meaningful progress towards change. To that end, the IAA is committed to working collectively with its members and with policymakers to seek to promote diversity, equity, and inclusion as a value for our industry and to providing education, information, and resources to help foster significant progress.
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DOL Issues FAQs for Firms, Guidance for Investors on Fiduciary Exemption
DOL Anticipates Amending Fiduciary Exemption, Other Exemptions, and ERISA Investment Advice Fiduciary Regulation
Less than two months after allowing the Department of Labor’s new Fiduciary Exemption to take effect, the DOL’s Employee Benefits Security Administration (EBSA) has issued a set of frequently asked questions (FAQs) on the exemption (see this IAA Today article discussing the exemption. This exemption covers only non-discretionary advice, so its primary application to advisers providing discretionary management likely will be with respect to rollovers.
Ali Khawar, Acting Assistant Secretary of Labor for Employee Benefits, said in a press release that the FAQs “provide assistance to financial institutions and investment professionals as they ramp up compliance with the exemption.”
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DOL Issues First Ever Cybersecurity Guidance
The DOL’s Employee Benefits Security Administration (EBSA) has issued its first ever cybersecurity guidance to help plan sponsors, fiduciaries, and record keepers protect plan participants and assets from both internal and external cyber risks. The guidance is contained in three separate documents, which we review in this article – Cybersecurity Program Best Practices, Tips for Hiring a Service Provider with Strong Cybersecurity Practices, and Online Security Tips for plan participants and beneficiaries.
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SEC Risk Alert Outlines ESG Exam Focus Areas, Related Deficiencies, Effective Compliance Practices
The SEC’s Division of Examinations has issued a Risk Alert describing areas of focus in examinations of advisers and funds engaging in ESG investing, compliance deficiencies and weaknesses from recent examinations in this area, and examples of effective compliance practices. The Risk Alert highlights the increased investor demand for and growth in ESG investment products and services, and the different ways that firms approach ESG investing. It also stresses that, with the lack of standardization in ESG definitions, portfolio management practices must be consistent with “disclosed ESG investing processes or investment goals.”
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As Policy Debates Intensify, IAA Launches New ESG Committee
Webinar with Head of SEC Enforcement Climate and ESG Task Force Set for May 4
To ensure that the interests of investment advisers are protected and advanced in ongoing ESG and Climate policy debates, the IAA has established an ESG Committee to help guide our advocacy efforts and to provide a forum for member consideration of ESG-related policy, regulatory, and compliance issues more generally. ESG has become a high priority for the SEC, which has taken a flurry of related actions in recent weeks, and for other regulators. The IAA plans to be actively engaged in related policymaking efforts with the help of members on the committee.
The new ESG Committee will be chaired by Heidi Hardin, Executive Vice President and General Counsel of MFS Investment Management. Carlotta King, General Counsel and Corporate Secretary of Diamond Hill Capital Management, will serve as Vice Chair.
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