Chairman Paul Atkins Says SEC Reassessing ESG-Focused Names Rule

U.S. Securities and Exchange Commission (SEC) Chairman Paul Atkins said the agency has begun reviewing rules related to ESG and sustainability-labelled funds, including the 2023 amendments to the Names Rule. He made the remarks during testimony before the U.S. House Financial Services Committee.

The amendments updated the Names Rule, first adopted in 2001, and require funds whose names indicate a specific investment focus to allocate at least 80% of their assets in line with that focus. While the rule applies broadly, it addresses ESG and sustainability-labelled funds and the use of terms such as ‘sustainable’ and ‘green’ in fund names, citing investor protection concerns. Atkins said the Commission is conducting a review of rules that impose costs on investors to determine whether they remain appropriate. He did not provide details on the scope or timeline of the review.

The review follows other steps by the Commission to revisit sustainable investing-related initiatives adopted in recent years.