AFREF sent a letter commenting on the Security and Exchange Commission’s proposed rule to increase the transparency and efficiency of the securities lending market. Having already commented in support of the proposed rule, we submitted an additional comment to address its corporate governance implications. The securities lending market—as it pertains to equity shares—has important corporate governance implications, as investors cannot vote shares on loan. In our comment, we recommend the Commission enhance the proposed rule’s public disclosures to give investors the tools they need to ensure the securities lending practices of asset managers and retail brokers do not interfere with investors’ role in corporate governance.
WASHINGTON, D.C. — The Securities and Exchange Commission (SEC) has issued an important and thoughtful proposal to require mandatory climate financial risk disclosure from public companies. We look forward to commenting on ways that the proposal must be strengthened, in particular with respect to greenhouse gas emissions reporting and corporate climate-related impacts on communities.
AFREF sent a comment to the Securities and Exchange Commission calling for the agency to close long-running loopholes that have enabled certain hedge funds to use swaps and derivatives to avoid disclosing large positions which in turn can lead to coordinated attacks on companies and unnecessary volatility in the underlying prices of certain companies’ stocks. The implosion of family office Archegos Capital is emblematic of such a problem as its use of certain derivatives to build over an over 10% position of a company’s outstanding shares were never revealed until after it was forced to unwind and leading Globally Systemically Important Banks (G-SIBs) to take over $10 billion in losses as a result.
Letters to Regulators: Comment Letter Supporting the SEC’s Proposal to Expand Position Disclosure Requirements via Form PF
AFREF sent a comment to the Securities and Exchange Commission supporting the agency’s proposal to expand position disclosure requirements (via Form PF) for both hedge funds and private equity funds. Many of the disclosure exemptions were formed when both types of funds were fractions of the size they are today and would give the SEC and by extension, the Financial Stability Oversight Council (FSOC) critical information to prevent the uncertainty and threats to financial stability that we saw with Long Term Capital Management in 1999 as well as the financial crises of 2008 and March 2020.
AFREF sent a letter commenting on the Security and Exchange Commission’s proposed rule to implement Section 953(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act, relating to executive compensation for financial performance. The letter welcomes the SEC’s implementation of this important provision and makes recommendations to minimize executives’ incentives to focus on short-term shareholder returns at the expense of longer-term investments that contribute to equitable and sustainable economic growth over time.
Petition to the SEC: 16k Petitioners Urge SEC to Require Climate Risk and Carbon Emissions Disclosure
Americans for Financial Reform delivered 16,658 petition signatures calling on the Securities and Exchange Commission (SEC) to make it mandatory for large companies and banks to disclose their total greenhouse gas emissions, including financed emissions, to investors and the public.
AFREF released a fact sheet summarizing the SEC’s two sets of rule proposals that will
provide investors and regulators with greater transparency into several aspects of the $18 trillion private fund industry.
Wall Street’s private equity barons smashed previous records to complete $1.2 trillion worth of acquisitions in the United States in 2021, an all-time record. Globally, the industry gobbled up companies worth $2.1 trillion. The new acquisitions and the massive debts the industry generates is creating the risk of “the dotcom boom meeting with the financial crisis,” according to one insider.
Today’s proposals from the Securities and Exchange Commission would shed greater light on the investments and activities of what’s now become a massive $11.5 trillion private market.
Letters to Regulators: Letter Calling on the SEC to Rescind the 2010 Ford Motor Credit No-Action Letter
AFREF led a letter calling on the SEC’s Division of Corporation Finance to rescind the 2010 Ford Motor Credit no-action letter that exempts Credit Rating Agencies from legal liability.