Trade Group Mounts Legal Challenge Against Missouri After ESG Backlash
The Securities Industry and Financial Markets Association (SIFMA) filed a lawsuit accusing Missouri of "overstepping its boundaries" after the state passed a rule to curb the impact of environmental, social, and governance (ESG) factors in investment decisions. Under the new rule, broker-dealers in Missouri would be required to obtain consent from customers to purchase or sell an investment product based on social or other non-financial objectives. SIFMA said the rule was in conflict with federal securities laws, which advocate a uniform regulatory regime across the country. The lawsuit, filed against Missouri Secretary of State John Ashcroft and Securities Commissioner Douglas Jacoby, marks one of the biggest challenges to a Republican-led backlash that has engulfed major Wall Street firms such as BlackRock and Wells Fargo.
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