FOR MEMBER REVIEW: Draft Response to CFA Institute Exposure Draft of Verification Procedures for CFA Institute ESG Disclosure Standards for Investment Products - Input due September 13

[33758]

September 8, 2021

TO: ESG Task Force
EU ESG Disclosure Regulation Working Group
Global Regulated Funds Committee
Global Regulated Funds Committee - Asia
SEC Rules Committee RE: FOR MEMBER REVIEW: Draft Response to CFA Institute Exposure Draft of Verification Procedures for CFA Institute ESG Disclosure Standards for Investment Products - Input due September 13

 

Attached for your review is ICI's draft response to the CFA Institute's Exposure Draft of Verification Procedures for CFA Institute ESG Disclosure Standards for Investment Products (Verification Procedures Exposure Draft).[1] Please provide your comments to Annette Capretta at acapretta@ici.org by 5:00 pm ET on September 13.  Comments are due to the CFA Institute by September 21, 2021.

The Verification Procedures Exposure Draft builds on a May 2021 Exposure Draft of CFA Institute Disclosure Standards for Investment Products (CFA Standards Exposure Draft), which would establish voluntary, global industry disclosure requirements for investment products with environmental, social, and governance (ESG)-related features (CFA Standards).[2]

The Verification Procedures Exposure Draft seeks feedback on the proposed verification procedures for the CFA Standards.

In response to the last question posed in the Verification Procedures Exposure Draft,[3] we reiterate the following points that we made in response to the CFA Standards Exposure Draft:[4]

• We oppose the adoption of the CFA Standards because they merely offer different, but not materially improved, standards in comparison to a plethora of existing standard-setting efforts and would impose undue and unnecessary burdens on investment managers, with questionable benefit to investors; and
• In light of the significant oversight that already exists for regulated funds and their investment advisers, we strongly urge the CFA Institute to revise the recommendation for an independent verification to exclude circumstances when an investment product is regulated and already subject to extensive legal requirements and regulatory review and examination.

 

Annette Capretta
Associate General Counsel

 

endnotes

[1] For a summary of the Verification Procedures Exposure Draft, see Memorandum No. 33717 (Aug. 6, 2021), available at https://www.ici.org/memo33717. The Verification Procedures Exposure Draft is available at https://www.cfainstitute.org/-/media/documents/code/esg-standards/exposuredraftverificationprocedurescfainstituteesgdisclosurestandardsforinvestmentproducts.ashx.

[2] For a summary of the CFA Standards Exposure Draft, see Memorandum No. 33542 (May 20, 2021), available at https://www.ici.org/memo33542.

[3] The list of questions posed in the Verification Procedures Exposure Draft is included in Memorandum No. 33717 (Aug. 6, 2021), available at https://www.ici.org/memo33717.

[4] For a summary of ICI's response to the CFA Standards Exposure Draft, see Memorandum No. 33687 (Jul. 14, 2021), available at https://www.ici.org/memo33687.