Archive: March 2023

1
EUROPE: UK’s FCA Issues Stern Warning to ESG Benchmark Administrators for Lack of Rigour
2
Staff Provides Legend Alternative for Non-Transparent ETFs Short on Ad Space
3
UNITED STATES: Goodbye M&A Brokers No Action Letter, Hello Federal Exemption
4
APAC: Managed Accounts and Conflicts—Part 2: Managed Accounts vs Commingled Funds
5
AUSTRALIA: Registered scheme and CCIV compliance: Obligation to give notice of members’ rights

EUROPE: UK’s FCA Issues Stern Warning to ESG Benchmark Administrators for Lack of Rigour

By Zainab Kuku

The FCA did not hold back in its most recent comments to ESG benchmark administrators, in an indication of its increasingly adversarial approach to ‘greenwashing’. It described the quality of disclosures of ESG factors considered in benchmark methodologies as ‘poor’, and aimed clear warning shots at administrators who fail to comply with the FCA’s feedback. 

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Staff Provides Legend Alternative for Non-Transparent ETFs Short on Ad Space

By Keri E. Riemer

Non-transparent exchange-traded funds (ETFs) that are struggling to fit in digital advertisements the specific risk legend set forth in their exemptive orders (Exemptive Order Risk Legends) may be in luck. On 29 March 2023, the staff (Staff) of the Division of Investment Management of the U.S. Securities and Exchange Commission (SEC) issued a statement (Statement) requesting that non-transparent ETFs use in such ads either (i) the text and formatting of their Exemptive Order Risk Legends; or (ii) the following text and formatting (with bold as shown and without bullets) (the Staff Risk Legend):

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UNITED STATES: Goodbye M&A Brokers No Action Letter, Hello Federal Exemption

By Eden L. Rohrer and Jessica D. Cohn

On 29 March 2023, the federal exemption from securities broker registration for qualifying mergers and acquisitions brokers (M&A brokers) became effective. That exemption was signed into law on 29 December 2022 as a policy rider to the Consolidated Appropriations Act of 2023 (H.R. 2617) (the M&A Brokers Exemption) and was described in our previous blog post and client alert

The M&A Brokers Exemption can now be found in subsection (13) “Registration Exemption for Merger and Acquisition Brokers” of Section 15(b) of the Securities Exchange Act of 1934.

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APAC: Managed Accounts and Conflicts—Part 2: Managed Accounts vs Commingled Funds

By Scott Peterman

In our last post, we suggested that managed accounts of whatever structure have become more and more popular among institutional investors. Our list included advantages of managed accounts often seen in print or discussed among panel participants in seminars. We did not, however, itemize all of the incentives motivating many institutional investors to prefer managed accounts over commingled funds. We’ll do so now to introduce and illuminate the reasons why and how conflicts of interest are created when fund managers manage separate client accounts alongside commingled funds. And, hopefully, give you some takeaways when managing your own investment management business.

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AUSTRALIA: Registered scheme and CCIV compliance: Obligation to give notice of members’ rights

By Matthew Watts and Rebecca Mangos

As the end of the 2023 financial year fast approaches, responsible entities and CCIV corporate directors should be reminded of their obligation to notify members by 30 June 2023 of their rights to elect and request to receive certain documents in physical or electronic form.

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