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What’s in a Fund Labelled “ESG”? The SEC Seeks Comment on the Application of the Names Rule to ESG Funds

Alerts and newsletters | April 24, 2020

In recent years, asset managers have been rushing to meet investor demand for so-called “environmental, social and governance” (“ESG”) or “sustainable” funds. Given the importance of fund names to investors, the SEC recently published a request for comment in the Federal Register regarding the application of the Names Rule to “ESG” or “sustainable” funds. In light of the questions posed in the request for comment as well as other recent SEC initiatives regarding ESG funds and broader concerns regarding “greenwashing,” it appears that the SEC is evaluating whether to limit or clarify the use of terms such as “ESG” and “sustainable” in the next version of the Names Rule.

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