At an Asset Management Advisory Committee meeting, SEC officials considered issues relating to (i) diversity and inclusion and (ii) technology and data privacy in the asset management industry.
On diversity and inclusion, SEC Chair Jay Clayton expressed interest in the "role of diverse-owned asset management firms in providing advisory services to investors." Mr. Clayton asked the committee to consider how to (i) improve diversity in the asset management industry, as well as access to opportunities for advancement, and (ii) leverage SEC and industry resources to provide services and opportunities to a more diverse base of Main Street investors. On technology, Mr. Clayton asked the panel for feedback on how data privacy laws impact the ability of advisers to take advantage of technological innovation.
SEC Commissioner Hester Peirce raised questions on how "diversity" and "inclusion" are defined. She cautioned against reliance on numerical metrics, since "they may strip people of their individuality." Ms. Peirce urged meeting participants to consider the benefits of exposing children to financial literacy and/or career exploration in the financial services industry. She posited that market forces will address issues concerning diversity and inclusion as more young Americans take interest in the asset management industry as a possible career choice. With regard to technology and data privacy, Ms. Peirce underscored the importance of collecting only the information that is necessary. She also urged the committee to consider regulatory changes that would accommodate new technologies.
SEC Commissioner Elad Roisman recognized the effort of the SEC's Office of Minority and Women Inclusion (or "OMWI") in guiding SEC-regulated entities in their self-assessments of diversity policies and practices. He raised additional concerns about the prevalence of "relying on the same go-to" hiring processes, candidate pools and networks and their impact on accessibility to qualified job candidates. On technology, Mr. Roisman highlighted the dramatic operational changes that have taken place as a result of the COVID-19 pandemic and the resulting increased cybersecurity risks.
SEC Division of Investment Management Director Dalia Blass noted the business incentive for increasing accessibility and representation in the asset management industry. Specifically, she cited research that "found that women-and diverse-owned firms-were overrepresented in the top quartile investment performance of all of the funds considered." She also highlighted the enhanced creativity and decision-making brought about by "diversity of thought and background." With regard to technology, Ms. Blass prioritized cybersecurity and data privacy. She reiterated the need for asset managers to have robust processes in place to protect customer data.
- SEC Press Release: SEC Issues Agenda for July 16 Special Meeting of the Asset Management Advisory Committee
- SEC Statement, Hester Peirce: Opening Remarks at the July 16, 2020 Special Meeting of the Asset Management Advisory Committee
- SEC Statement, Elad Roisman: Statement at the Meeting of the Asset Management Advisory Committee
- SEC Statement, Jay Clayton: Opening Remarks at the July 16, 2020 Special Meeting of the Asset Management Advisory Committee
- SEC Statement, Dalia Blass: Opening Remarks at the Meeting of the Asset Management Advisory Committee
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