Clifford Chance

Giving The Greenlight - The SEC Encourages Investment Advisers to Consider DEI Factors

October 21, 2022

On October 12, 2022, the United States Securities and Exchange Commission released guidance pertaining to the consideration of Diversity, Equity, and Inclusion factors by investment advisers. In it, the SEC clarified that an investment adviser, in accordance with its fiduciary duty, may consider DEI factors when recommending or selecting other advisers for clients, "provided that the use of such factors is consistent with a client's objectives, the scope of the relationship, and the adviser's disclosures." While the SEC made clear that the guidance has no legal effect or force, it further contributes to the blurring of the lines between seeking to maximize investor returns and social considerations.

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