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 aimed at increasing diversity and inclusion in the asset management industry.
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 commission. The recommendations included requiring enhanced disclosure in SEC filings by registered investment advisers on the racial diversity of their workforce, officers and owners; directing 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 fiduciaries in their selection of asset management firms; and for the SEC to set up a formal process for managing complaints of discriminatory practices in the asset management industry, including employment and independent contracting.
"It is clear that the promotion of diversity within the asset management industry would not only improve performance to the benefit of investors, it would 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, D-N.J., said in the letter.
An SEC spokeswoman declined comment on the letter in an email.
At the Asset Management Advisory Committee meeting in July, Mr. Gensler said he had asked SEC staff to consider ways to improve transparency into the asset management industry's diversity and inclusion practices. "The asset management industry has a lot of work to do to increase racial and gender diversity," Mr. Gensler said at the meeting.
Less than 1% of $70 trillion in global financial assets are managed by minority-owned or women-owned firms, while among asset management firms, percentages of ownership interests by women and people of color "remains startlingly and disproportionately low, by any and every objective measure," according to an SEC subcommittee on diversity and inclusion report presented at the July meeting.
In February, Mr. Menendez introduced the Improving Corporate Governance Through Diversity Act of 2021, which would revise SEC rules on diversity disclosure to require that companies disclose racial, gender, ethnic makeup and veteran status of their boards and senior management. The bill has yet to move in the Senate, but a companion bill in the House was also introduced in February and was passed out of the House Committee on Financial Services by voice vote in April.
