U.S. SEC seeks data from index providers over role in investment decisions By Reuters

© Reuters. FILE PHOTO: The seal of the US Securities and Exchange Commission (SEC) is seen at their headquarters in Washington, DC, US, May 12, 2021. REUTERS / Andrew Kelly / File Photo

(Reuters) – The US Securities and Exchange Commission (SEC) on Wednesday requested information on the activities of financial information providers amid growing concerns over their influence on investment decisions, despite not being fully regulated.

Critics have expressed concerns that information providers, particularly index companies such as S&P Global (NYSE :), MSCI and Russell which assist in trillions of dollars of investment decisions globally, have acted as unregulated investment advisors.

“The role of these information providers today raises important questions under the securities laws as to when they are providing investment advice rather than merely information,” US SEC chair Gary Gensler said in a statement.

Index providers are currently treated as data publishers by the SEC.

The information gathered will help the watchdog to understand whether information providers should be regulated, given the influence of these companies in driving investment decisions, the statement said.

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