Publications

(Article from Registered Funds Regulatory Update, July 2022)

For more information, please visit the Registered Funds Resource Center.

A bill was recently introduced in the Senate and House of Representatives that is intended to improve access for diverse-owned asset management firms. The bill, known as the Too Narrow to Succeed Act, would:

• increase transparency on how federal institutional investors (as defined in the bill, and including entities such as the Federal Retirement Thrift Investment Board) select asset management firms;
• identify barriers that limit opportunities for diverse-owned firms and develop strategies to remove such barriers; and
• enable retirement funds to adopt a broader and more inclusive selection process to reduce risk and maximize returns.

If passed, federal institutional investors that use the services of an asset management firm to manage federal investments would be required to submit an annual report to the Secretary of Labor on the investor’s use of diverse-owned asset management firms, including the amount of assets managed by non-diverse-owned asset management firms versus diverse-owned firms. The report would also need to note any challenges the federal institutional investor faced in selecting diverse-owned firms and the actions taken to increase opportunities for diverse-owned firms.

The bill also requires the Secretary of Labor to conduct a periodic survey of the best practices with respect to increasing the utilization and capacity of diverse-owned asset management firms and report the findings to Congress.

Too Narrow to Succeed Act, H.R. 7594, 117th Cong. (2022), available at: https://www.congress.gov/bill/117th-congress/house-bill/7594/text.