The Division’s focus on ESG investing as a primary priority area demonstrates its commitment to offering consumers and investors with transparent, reliable, and consistent data regarding ESG strategies and practices. As the need for ESG investments increases, the SEC is committing more resources to enforcement in this sector. Businesses must make sure that their filings comply not only with investor requests and market demand but also with SEC rules and expectations.
With regard to external practices, registered financial firms should assess their ESG-based disclosures, public statements, and advertising to ensure their accuracy and consistency. In addition, organizations should ensure that their internal rules and procedures effectively solve ESG investing and offer adequate oversight of compliance.
The Division of Exams of the SEC is performing more private fund manager inspections than in prior years. The Division will remain focused on important problems for personal fund managers, like fiduciary duties, fees and expenditures, fund custody, compliance programs, audits, conflicts of interest, valuation, disclosure of investment threats, and procedures for dealing with non-public information.