Senate Democrats pressure SEC to adopt diversity and inclusion measures

A group of 22 Senate Democrats sent a letter to U.S. Securities and Exchange Commission Chairman Gary Gensler on Monday urging the SEC to adopt recommendations to increase diversity and inclusion in management of assets.

In July, the SEC’s Asset Management Advisory Committee unanimously approved several recommendations on diversity and inclusion that have yet to be approved by the full committee. The recommendations included requiring increased disclosure in SEC filings by registered investment advisers about the racial diversity of their workforce, officers and owners; ask SEC staff to study the influence of political contributions on asset allocation in the institutional market and to clarify that a wide variety of factors may be considered by trustees in their selection of investment companies. asset management; and for the SEC to put in place a formal process for handling complaints of discriminatory practices in the asset management industry, including employment and independent contracts.

“It is clear that promoting diversity within the asset management industry would not only improve performance for the benefit of investors, but also align with the SEC’s diversity and inclusion goals and its mandate to protect investors and facilitate fair and open markets, ”the Senators, led by Sen. Robert Menendez, DN.J., said in the letter.

An SEC spokeswoman declined to comment on the letter in an email.

At the Asset Management Advisory Board meeting in July, Gensler said he asked SEC staff to consider ways to improve transparency of diversity and inclusion practices. in the asset management industry. “The asset management industry has a lot of work to do to increase racial and gender diversity,” Gensler said at the meeting.

Less than 1% of the $ 70 trillion in global financial assets are managed by minority or women-owned companies, while among asset management companies, the percentages of female and personal ownership color “remains surprisingly and disproportionately low, by all objective measure,” according to a report from the SEC’s diversity and inclusion subcommittee presented at the July meeting.

In February, Menendez introduced the Improving Corporate Governance Through Diversity Act of 2021, which would revise the SEC’s diversity disclosure rules to require companies to disclose race, gender , ethnic makeup and veteran status of their boards and leadership. The bill has yet to be tabled in the Senate, but a complementary House bill was also introduced in February and was passed by the House Committee on Financial Services by voice vote in April.

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