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Waters and Beatty Blast Lack of Diversity on SEC Advisory Committees

Washington, January 14, 2020
Today, Congresswoman Maxine Waters (D-CA), Chairwoman of the House Financial Services Committee, and Congresswoman Joyce Beatty (D-OH), Chair of the Subcommittee on Diversity and Inclusion, sent a letter to Jay Clayton, Chairman of the Securities and Exchange Commission (SEC), expressing concerns about the ongoing lack of ethnic and racial diversity on the agency’s four advisory committees, including the newest 23-member Asset Management Advisory Committee which includes no Black committee members.


“Advisory committees play an important role across the federal government by providing advice and recommendations to the executive branch,” the lawmakers wrote. “To most effectively articulate industry concerns to the SEC, these committees should represent the diversity of the issue areas as well as reflect the demographic diversity of the businesses and consumers under SEC authority and purview. Unfortunately, the Financial Services Committee review of SEC’s current advisory committee demographics—the Investor Advisory Committee, the Small Business Capital Formation Advisory Committee, the Fixed Income Market Structure Advisory Committee and the newest committee, the Asset Management Advisory Committee 1— reveals that only a limited number of Latinos and Blacks serve as committee members.”

Waters and Beatty also highlighted the lack of diverse perspectives at today’s inaugural meeting of the agency’s Asset Management Advisory Committee.

“…it is no surprise that the Asset Management Advisory Committee with its limited diverse membership would propose an agenda for its inaugural meeting with no plan to discuss the historical bias against and limited investment with diverse-owned asset management firms.”

Waters and Beatty have long called for increased diversity in the financial services industry.

In May 2019 and June 2019, the lawmakers sent letters to the nation’s largest bank holding companies requesting their diversity and inclusion data and policies from 2015 to the present.

In March 2019, the lawmakers were joined by Congresswoman Carolyn Maloney (D-NY) in expressing concerns regarding a GAO report they requested regarding diversity at Federal Home Loan Banks.

In January 2019, Chairwoman Waters created the Subcommittee on Diversity and Inclusion, the first of it’s kind in Congress, to examine disparities in the financial services industry. 

See the full text of the letter below.

Dear Chairman Clayton:

We are writing to express concerns about the continued lack of ethnic and racial diversity on advisory committees at the Securities and Exchange Commission (SEC). Advisory committees play an important role across the federal government by providing advice and recommendations to the executive branch. To most effectively articulate industry concerns to the SEC, these committees should represent the diversity of the issue areas as well as reflect the demographic diversity of the businesses and consumers under SEC authority and purview. 

Unfortunately, the Financial Services Committee review of SEC’s current advisory committee demographics—the Investor Advisory Committee, the Small Business Capital Formation Advisory Committee, the Fixed Income Market Structure Advisory Committee and the newest committee, the Asset Management Advisory Committee — reveals that only a limited number of Latinos and Blacks serve as committee members. It appears that only 3 of SEC’s 79 advisory committee members are Black. Among the women of color currently serving, it also appears that there are seven Asian women, only one Black woman, and zero Latinas on SEC’s advisory committees. Two advisory committees have one Latino member, but that same Latino male serves on both committees. The formation of a new advisory committee presented an opportunity to approve a diverse slate of members. Alas, SEC’s October 2019 announcement of the 23-member Asset Management Advisory Committee includes no Black committee members.

Moreover, it is no surprise that the Asset Management Advisory Committee with its limited diverse membership would propose an agenda for its inaugural meeting with no plan to discuss the historical bias against and limited investment with diverse-owned asset management firms. 

To best examine this advisory committee diversity concern, please provide a response to the following about SEC’s advisory committee process:

  1. Data on the demographics of SEC’s advisory committee members since 2015.

  2. Description of SEC’s advisory committee appointment process, including:

    Extent to which SEC commissioners and your office required that a diverse slate of candidates be offered for consideration for each advisory committee seat;

    Who at SEC or otherwise approves the final list of advisory committee members;

    SEC’s diversity policies related to the appointment of advisory committee members;

    Any challenges you or SEC commissioners face in selecting diverse individuals as advisory committee members.

  3. Description of the role of the Office of Minority, Women and Inclusion, including:

    Any review of the diversity of the proposed advisory committee members;

    Tracking the diversity demographics of SEC’s advisory committees;

    Assisting commissioners with identifying diverse candidates for advisory committee seats.

  4. Description of SEC’s plan to immediately and continually increase the representation of racial and ethnic minorities on its advisory committees.

We appreciate your full attention to this matter and ask that you provide a response to this inquiry, no later than January 31, 2020. You may contact committee staff Erica Miles at (202) 225-4247 with any questions regarding this request.

Sincerely, 

The Honorable Maxine Waters 
Chairwoman 
Committee on Financial Services 

 

The Honorable Joyce Beatty 
Chair 
Committee on Financial Services 
Subcommittee on Diversity and Inclusion 



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