August 16, 2022

Submitted electronically via SEC.gov
Vanessa Countryman, Secretary
Securities and Exchange Commission
100 F Street, NE
Washington, DC 20549-1090

Re: File No. S7-17-22
Enhanced Disclosures by Certain Investment Advisers and Investment Companies about Environmental, Social, and Governance Investment Practices

Dear Ms. Countryman:

The Asset Management Group of the Securities Industry and Financial Markets Association (“SIFMA AMG”)1 appreciates the opportunity to comment on the Commission’s proposal2 to enhance disclosures by certain investment advisers and funds about their environmental, social and governance (“ESG”) investment practices (the “Proposal”).

SIFMA AMG supports the Commission’s aims to promote comparable, reliable and material information3 for investors by requiring certain disclosures for funds that consider ESG factors in their investments. We applaud the Commission’s decision to avoid prescriptive definitions of “ESG” and to focus on ensuring funds and managers provide adequate disclosures to support their claims about the role of ESG factors in their investment decisions.4

However, as discussed below, SIFMA AMG believes certain provisions of the Proposal can be modified to better achieve the Commission’s goals while providing investors with disclosures that are better targeted and more supportive of informed decision-making. We thus submit the following comments, which include suggested modifications and improvements, for the Commission’s consideration.

 

1 SIFMA AMG brings the asset management community together to provide views on U.S. and global policy and to create industry best practices. SIFMA AMG’s members represent U.S. and global asset management firms whose combined assets under management exceed $45 trillion. The clients of SIFMA AMG member firms include, among others, tens of millions of individual investors, registered investment companies, endowments, public and private pension funds, UCITS and private funds such as hedge funds and private equity funds. For more information, visit http://www.sifma.org/amg. SIFMA AMG appreciates the assistance of George B. Raine, James D. McGinnis, Jennifer Choi and Colton Canton of Ropes & Gray LLP in the preparation of this response.

2 Enhanced Disclosures by Certain Investment Advisers and Investment Companies about Environmental, Social, and Governance Investment Practices Release No. IA-6034, 87 Fed. Reg. 36654 (proposed May 25, 2022), available at https://www.sec.gov/rules/proposed/2022/ia-6034.pdf (the “Proposing Release”).

3 See Proposing Release at 1 (“The proposed rules and form amendments are designed to create a consistent, comparable, and decision-useful regulatory framework for ESG advisory services and investment companies to inform and protect investors while facilitating further innovation in this evolving area of the asset management industry.”)

4 SIFMA AMG appreciates that the Commission has included a 60-day comment period for this rulemaking. See Proposing Release at 1. SIFMA AMG continues to believe that, consistent with federal guidance on rulemaking procedure, the public should be provided a minimum of 60 days to comment on rule proposals. See Joint Comment Letter from SIFMA & SIFMA AMG on the “Importance of Appropriate Length of Comment Periods” (Apr. 5, 2022), available at https://www.sifma.org/resources/submissions/importance-of appropriate-length-of-commentperiods. However, given the complexity of the rulemaking and the Commission’s crowded overall agenda, the Commission should consider extending the comment deadline to provide commenters due time to provide thoughtful commentary on the proposal and its interactions with other proposed changes to the federal securities laws, including but not limited to changes to the proxy rules, rules relating to fund names, additional disclosures relating to cybersecurity risk management, the proposed Climate Disclosure Rule and the possible proposal of additional disclosures relating to human capital management.