K&L Gates Releases Q&A on Proposed ESG Reforms for Registered Funds

Recently, the SEC proposed significant disclosure and reporting requirements for registered funds that use environmental, social, and governance (ESG) factors in their investment practices. As an additional tool to understand the depth and reach of this rule proposal, K&L Gates released a Q&A fund alert addressing the potential challenges imposed by the SEC approach. The Q&A is designed to provide responses to topics that may not have been specifically addressed in the proposed rule and intends to highlight some of the tremendous challenges that certain funds would face if the proposal were adopted without modification. The alert notes that certain funds facing particularly important changes include: multi-manager funds, funds-of-funds, funds that use derivatives, funds that apply limited inclusionary or exclusionary screens in their investment process, funds with certain names and funds that would be subject to greenhouse gas (GHG) emissions disclosure and reporting requirements, among other entities.