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SEC Planned Crackdown on ‘Misleading’ Funds Goes Far Beyond ESG

May 26, 2022, 7:34 PM

New proposals from the US Securities and Exchange Commission to crack down on money managers using misleading or deceptive fund names threaten to impact investing strategies of all stripes -- not just those focused on ESG issues.

The Wall Street watchdog floated tighter rules Wednesday to ensure a product’s name is squarely focused on its actual strategy, with most observers fixating on what the restrictions mean for socially responsible investing. Yet the proposals could hit thousands more funds trading everything from value and growth stocks to bonds and emerging markets.

Under the new rules, products with names featuring terms as ...