AAAIM Co-Chair Brenda Chia serves on the subcommittee and has pushed for greater transparency in the industry and greater AAPI participation. Both Brenda Chia and Clayton Jue, members of AAAIM’s Executive Board, have testified in series of hearings held by the SEC in 2020. The focus of the Subcommittee has been on the current state of diversity and inclusion in the industry, as well as ways to bring about greater participation from traditionally underrepresented groups. The Subcommittee also considered investor need for transparency regarding matters of diversity and the ease or challenge associated with access to reliable disclosure.
These hearings and the subcommittee’s ongoing efforts resulted in several key recommendations for the SEC to implement. Those recommendations include:
- Transparency of Diversity Within a Firm: Requiring enhanced disclosure in SEC filings by investment advisers to to provide transparency on issues of gender and racial diversity in the workforce, officer ranks, and ownership ranks of advisory firms.
- Fund Board and Fund Adviser Diversity: Requiring enhanced disclosure in SEC filings for investment companies required to provide transparency on gender and racial diversity on the fund board(s) of each fund, as well as issues of gender and racial diversity in the workforce, officer ranks, and ownership ranks of advisory and sub-advisory firms employed by each investment company registrant.
- Transparency of Business Practices for Consultants Who Recommend Investment Advisers and Investment Funds: Enhancing disclosure in SEC filings to provide transparency in material business practices relevant to an investor’s assessment of gender and racial diversity and inclusion.
- Additional Look at Fiduciaries Selecting Asset Managers: The subcommittee also suggest that the definitions used by many fiduciaries may be too narrow and the diligence checklist could lead to exclusionary outcomes, such as minimum AUM and minimum length of performance track record, that have the direct or indirect impact of eliminating nearly all asset management firms owned by women and people of color from consideration in the selection process for institutional asset management.
AAAIM will continue to work with the SEC to build a more transparency investment opportunities for diverse managers and we provide additional updates on possible adoption of these recommendations.