Wednesday, July 7, 2021
On May 17, 2021, the SEC announced that it had settled charges against S&P Dow Jones Indices LLC for alleged violations of Section 17(a)(3) of the Securities Act of 1933 relating to the failure to disclose a feature of an index tracked by an exchange-traded note (ETN) that resulted in the publication of index values that did not accurately reflect the economic value of the ETN.
S&P Indices published the index in question, the S&P 500 VIX Short Term Futures Index ER, based on the price of certain volatility-based futures contracts, and entered into agreements to license the index to, among others, an issuer of an inverse ETN. S&P Indices designed the index with an “auto hold” feature such that if the index experienced a significant spike, the publication of new index values would be frozen and the prior index value would continue to be published until such time as the index value came back within those thresholds or personnel manually releas
Navigating Uncertain ESG-Related Risks at the SEC | Pillsbury Winthrop Shaw Pittman LLP
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ESG Public Policy and Creating Sustainable Business Economy
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On April 9, 2021, the SEC’s Division of Examinations (f.k.a. OCIE) (the “
Alert”) highlighting observations from exams of registered investment advisers (“
RIAs”), registered investment companies, and private funds recommending or offering environmental, social, and governance (“
ESG”) -related investment products and services.[i] The Alert, which was closely followed by a public statement regarding the Alert from SEC Commissioner Hester Peirce (the “
Peirce Statement”),[ii] is part of a flurry of recent SEC activity regarding ESG-related investment products that appears to have arisen in response to the rapid growth of investor demand for such products and a corresponding increase in the number of ESG investment products and services offered to investors.[iii] For example, as noted in our recent legal alert,