May 9, 2022

SIFMA Urges DOL to Keep Principles-Based Regulation

In a response to a Request for Information, SIFMA urged the Department of Labor to continue using a principles-based approach to regulation and expressed concern that its proposed method for compliance with E.O. 14030 may deviate too far from that approach.

In the letter, SIFMA highlighted two main issues with the DOL's proposed approach to collecting information for climate-related risk, including concerns that guidance provided by the DOL:

  1. may overlap with SEC-issued guidance on protecting investors, which includes retirement investors; and
  2. would focus too heavily on the issue of the day, rather than the process of considering relevant and material risks.

This, according to SIFMA, could "harm plans by forcing fiduciaries to over-weight or under-weight some risks relative to others solely to comply with regulatory guidance."

SIFMA urged the DOL to "only take any further action on climate-related financial risk if they determine there is a unique situation for retirement investors that is not covered by anticipated new regulatory action that will address all investors."

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