August 12, 2022

Volume XII, Number 224

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August 12, 2022

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SEC’s ESG Proposal Includes Proposed Reporting Requirement for All Index Funds—Whether ESG-Focused or Not

Included within the SEC’s 362-page proposing release— issued on May 25, 2022 and seeking to implement standardized ESG-related disclosures for funds and advisers—is a proposed reporting amendment that would apply to all index funds, regardless of whether or not the fund tracks an ESG-related index. Specifically, the SEC is proposing amendments to Form N-CEN that would require index funds to report certain identifying information about the indexes they track.

Form N-CEN currently requires any fund that tracks the performance of an index to identify itself as an index fund and provide certain information about the index. The SEC’s proposal would require all index funds to report the name and legal entity identifier (LEI), if any, or provide and describe any other identifying number of the indexes the funds track.

The SEC’s proposing release suggests that the amendment would enable the SEC, investors and other market participants to more efficiently identify the use of particular indexes across the fund industry. Specifically, the SEC believes that an LEI—a unique and unchanging number—would provide more accurate identification of an index than its name alone since different sources may use different variations on an index’s name.

Comments on the proposal will be due 60 days after publication of the proposing release in the Federal Register. The SEC’s proposing release is available here.

© 2022 Vedder PriceNational Law Review, Volume XII, Number 161
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About this Author

Nathaniel Segal Investment Attorney Vedder Price Law Firm
Counsel

Nathaniel Segal is counsel at Vedder Price and a member of the Investment Services group. He focuses his practice on investment companies and investment advisers in connection with the organization and operation of investment products and services, including traditional mutual funds, closed-end investment companies (including interval funds and listed closed-end funds), variable insurance products and registered hedge funds, as well as mutual funds utilizing complex hedging and absolute return strategies. Mr. Segal has experience in conducting transactional due diligence...

(312) 609 7747
Jacob Tiedt,Vedder Price law firm investment services attorney
Shareholder

Jacob C. Tiedt is a Shareholder at Vedder Price and a member of the Investment Services group.

Mr. Tiedt’s practice includes the representation of registered mutual funds, closed-end funds and exchange-traded funds; private funds; investment advisers; and other financial institutions on a broad range of regulatory, governance and compliance matters. Mr. Tiedt regularly counsels clients on matters relating to SEC registration, disclosure and compliance; shareholder solicitation; NYSE, Nasdaq and FINRA regulation; corporate governance; and board administration. Mr....

312-609-7697
John Marten Investment Attorney Vedder Price Law FIrm
Shareholder

John S. Marten, a Shareholder in the Chicago office of Vedder Price, has substantial experience representing clients in the investment management industry.

As a member of the firm’s Investment Services group, Mr. Marten counsels clients on a wide variety of matters involving the application of the federal securities laws to investment companies, investment advisers and broker-dealers. He has significant experience counseling investment company clients with respect to new products and was recently involved in the creation of two mutual funds...

(312) 609 7753
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