Good morning and welcome to the last meeting of the Asset Management Advisory Committee for the year. Before I start, let me remind you that I am speaking only for myself and not for the Commission, the Commissioners, or the staff.[1]

As we close the AMAC’s first year, I would like to acknowledge the important work streams and issues on which the Committee has engaged and the valuable input it provided the Commission and its staff.

The AMAC explored the evolution of the industry, framing future discussions with a data-based foundation. After exploring the value proposition of the asset management industry, the evolution of the public and private securities markets, and the globalization of asset management, the Committee identified four initial priorities: retail clients’ access to private investments, ESG, diversity and inclusion, and the impact of data and technology. The Committee hosted panels and subcommittees analyzing each of the priorities. Despite this ambitious agenda, the Committee took the time to consider and offer recommendations on issues raised during the COVID-19 pandemic for the asset management space.[2]

Today, the ESG Subcommittee plans to offer potential recommendations for discussion. I would like to start by thanking the Subcommittee for its rigorous and thoughtful work in this area. ESG considerations are not new given that ESG funds have been on the market for decades. However, there has been tremendous evolution in this space, including with respect to investor interest. So, as the Committee looks into this topic, I believe that it is important to focus on how each recommendation would serve Main Street investors. Therefore, as the Committee discusses the ESG subcommittee’s potential disclosure recommendations, I offer a few initial questions:

a. The issuer disclosure recommendation appears to change the Commission’s historic approach to disclosure, which has been rooted in materiality as determined by the issuer. Why would this be appropriate with regard to ESG material risks and not for potential areas of risk?

b. Why is it appropriate to look to third-party standard setters who are not regulated by the Commission, or would the view be that they should be regulated? If so, how and by whom?

c. How would the disclosure liability provisions that are central to market and investor protections under the federal securities laws come into play when looking to third-party standard setters and mandated risk disclosures

d. The recommendation for corporate issuer disclosure is quite different from the one for fund issuer disclosures with the first looking to an authoritative and binding approach akin to GAAP and the second relying on current disclosure rules and best practices. It would be helpful to understand how this bifurcation is appropriate given the significant differences in fund ESG strategies?

I look forward to the discussion on this topic. In addition to the presentation by the ESG Subcommittee, the Private Investments Subcommittee will provide an update on its work and the Diversity and Inclusion Subcommittee will host a panel discussion. The panel is the latest in what has been a very informative series of discussions on challenges to improve diversity and inclusion in the asset management industry. I look forward to hearing from John Rogers, Martin Cabrera, and Ruby Dang, who are leaders at prominent minority financial firms.

As always, I would like to thank the Chairman and Commissioners for their participation today, as well as the staff from IM and the Commission’s Office of Information Technology for enabling us to meet today. I would also like to thank Ed, the Committee members, the Subcommittee chairs and our panelists today for dedicating this time to move us forward on these important topics. With that, Ed I turn it over to you and I look forward to the discussion.