ESG funds face US SEC probe over trading away votes – Bloomberg News

The seal of the US Securities and Exchange Commission (SEC) is seen at their headquarters in Washington, DC, US, May 12, 2021. REUTERS/Andrew Kelly

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Aug 15 (Reuters) – US regulators have been peppering firms offering funds that are marketed as sustainable with queries for several months, including how they lend out their shares and whether they recall them before corporate elections, Bloomberg News reported.

The US Securities and Exchange Commission’s probe is focused on whether managers of environmental, social and governance (ESG) funds are trading away their right to vote on such issues, the report said on Monday, citing four people with knowledge of the matter.

The investigation delves into whether asset managers are making the proper disclosures to investors, according to the report.

The SEC did not immediately respond to a Reuters request for comment.

Regulators have been making efforts to contain the risk of money managers overstating the ESG credentials of their products, which have racked up trillions of dollars. read more

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Reporting by Praveen Paramasivam in Bengaluru; Editing by Aditya Soni

Our Standards: The Thomson Reuters Trust Principles.


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