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Regulatory Round-up: US SEC’s extended consultation, ESG ratings in the UK and India, EU looks at ESG factors in securitisation products

The US Securities and Exchange Commission has extended the public comment period on it hotly-debated new proposals to toughen up climate-related disclosures for investors until June 17. The SEC released its draft rule on climate disclosures in March.  Seventy percent of US retail investors agree that the SEC should require public companies to disclose standardised information about these risks, according to a survey. But the SEC under Gensler is being drawn into a highly polarised debate about how far financial institutions should be persuaded to take ESG matters into account. 

The UK will not take a prescriptive approach on how ESG ratings should be framed but rather insist raters are transparent about their methods and governance, a senior official has suggested.  Adam Lyons, head of the Treasury’s green finance unit, said it was working with the Financial Conduct Authority to determine if the sector should now be regulated. Reuters reported Lyons as saying: “In terms of what that would look like, I think the first thing to say it’s definitely not being regulation focused on what the ratings are that ratings agencies are developing. It will be much more focused on ensuring proper practice, like declarations of conflicts of interest, for example … it’s much more about transparency.”

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