Asset Manager Engagement to Look Different
Welcome to this week's News Brief, a round up of some of Ignites' top stories of the past week.
BlackRock?and?Vanguard?each put a?pin?in their engagement efforts last week after regulators issued guidance on such activities from passive managers. But since, at least one of them has?resumed?meetings with portfolio companies. The?Securities and Exchange Commission?published a legal bulletin this month stating that asset managers that decide whether to support someone nominated as a corporate director based on factors related to environmental, social or political issues may have to register as activist investors.
The SEC's guidance means that asset manager engagement will, more broadly, have to look different, Ignites'?David Isenberg?reports. For example, companies may have change the way they frame meetings with executives at the companies they own. They also may be less inclined to notify companies if they plan to vote against a director.
In other regulatory news, House Democrats recently?urged?SEC Acting Chair?Mark Uyeda?to "safeguard" the agency's data and work from the?Department of Government Efficiency. DOGE, which is headed by?Elon Musk, has been tasked with?slashing costs?and reducing the number of government employees. "[I]mproper access to this sensitive information could have disastrous consequences for the stable functioning of the U.S. capital markets," the lawmakers wrote. For example, they could use the data to front-run investment decisions made by mutual funds, ETFs or money market funds.
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Vanguard’s ETF Shares
Since Vanguard's patent on the dual share class structured expired in May 2023, investors have piled $370 billion into the firm's ETF share classes,?Morningstar Direct?data?shows. More than 40 fund companies have asked the SEC for permission to offer the share class type,?Madison Hall?reports.
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