# Office of the Investor advocate

> Briefs, arguments, decisions, and more.

URL: https://www.frixlaw.com/law-library/documents/agency%3Asec%3A7f7f0d3a60c698f7

## Record

- **Collection:** Agency decision
- **Document type:** Agency decision

## Text

FISCAL YEAR 2022

Report on
Activities

Office of the Investor advocate

REPORT ON ACTIVITIES
FISCAL YEAR 2022

S

ection 4(g)(6) of the Securities Exchange
Act of 1934 (Exchange Act), 15 U.S.C. §
78d(g)(6), requires the Investor Advocate
to file two reports per year with the Committee
on Banking, Housing, and Urban Affairs of the
Senate and the Committee on Financial Services
of the House of Representatives.1 The two reports
are the mid-year Report on Objectives covering the
forthcoming fiscal year and the end-of-year Report
on Activities covering the preceding fiscal year.
A Report on Objectives is due no later than June
30 of each year, and its purpose is to set forth
the objectives of the Investor Advocate for the
following fiscal year.2 On June 28, 2021, the Office
of the Investor Advocate (Office) filed a Report on
Objectives for Fiscal Year 2022, which corresponds
to the activities carried out during Fiscal Year 2022
as reported herein.3

A Report on Activities is due no later than December
31 of each year.4 The Report on Activities describes
the activities of the Investor Advocate during the
immediately preceding fiscal year.
This current Report on Activities for Fiscal Year
2022 includes, among other things, information
about the steps the Investor Advocate has
taken during Fiscal Year 2022 to improve the
responsiveness of the Securities and Exchange
Commission (Commission or SEC) and
self-regulatory organizations (SROs) to investor
concerns. This Report also contains a summary of
the most serious problems encountered by investors
during the reporting period and identifies actions
taken by the Commission or SROs to address those
problems. Where applicable, this Report advances
recommendations, if any, for administrative and
legislative actions to resolve problems encountered
by investors.5

REPORT ON ACTIVITIES: FISCAL YEAR 2022

|

iii

Functions of the Investor Advocate

Reporting Obligation

According to Exchange Act Section 4(g)(4), 15 U.S.C.

According to Exchange Act Section 4(g)(6)(B), 15

§ 78d(g)(4), the Investor Advocate shall:

U.S.C. § 78d(g)(6)(B), the Investor Advocate shall

(A) assist retail investors in resolving significant

submit to Congress, not later than December 31 of each

problems such investors may have with the

year, a report on the activities of the Investor Advocate

Commission or with SROs;

during the immediately preceding fiscal year. This

(B) identify areas in which investors would benefit
from changes in the regulations of the
Commission or the rules of SROs;

“Report on Activities” must include the following:
(I) appropriate statistical information and full and
substantive analysis;

(C) identify problems that investors have with

(II) information on steps that the Investor Advocate

financial service providers and investment

has taken during the reporting period to improve

products;

investor services and the responsiveness of the

(D) analyze the potential impact on investors of
proposed regulations of the Commission and
rules of SROs; and
(E) to the extent practicable, propose to the
Commission changes in the regulations or
orders of the Commission and to Congress any
legislative, administrative, or personnel changes

Commission and SROs to investor concerns;
(III) a summary of the most serious problems
encountered by investors during the reporting
period;
(IV) an inventory of the items described in subclause
(III) that includes—
(aa) identification of any action taken by the

that may be appropriate to mitigate problems

Commission or the SRO and the result of

identified and to promote the interests of

such action;

investors.

(bb) the length of time that each item has
remained on such inventory; and
(cc) for items on which no action has been
taken, the reasons for inaction, and
an identification of any official who is
responsible for such action;
(V) recommendations for such administrative and
legislative actions as may be appropriate to
resolve problems encountered by investors; and
(VI) any other information, as determined appropriate
by the Investor Advocate.

Disclaimer: Pursuant to Exchange Act Section 4(g)(6)(B)(iii), 15 U.S.C. § 78d(g)(6)(B)(iii), this Report on Activities is
provided directly to Congress without any prior review or comment from the Commission, any Commissioner, any other
officer or employee of the Commission outside of the Office of the Investor Advocate or the Office of Management and
Budget. This Report on Activities expresses solely the views of the Investor Advocate. It does not necessarily reflect the
views of the Commission, the Commissioners, or staff of the Commission, and the Commission disclaims responsibility for
this Report on Activities and all analyses, findings, and conclusions contained herein.

iv

|

O F F I C E O F T H E I N V E S T O R A D V O C AT E

CONTENTS
MESSAGE FROM THE OFFICE OF THE INVESTOR ADVOCATE. . . . . . . . . . . . . . . . . . .1
INVESTOR ADVOCATE’S REPORT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
ADVOCACY FOR INVESTORS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Environmental, Social, and Governance (ESG) Disclosure. . . . . . . . . . . . . . . . . . . . . . 3
Rule 10b5-1 Plans. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Capital-Raising Alternatives. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Equity Market Structure. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Novel Exchange-Traded Funds. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Registered Fund Disclosure. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Broker Conduct. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Financial Exploitation of Senior Investors. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Accounting and Auditing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
PROBLEMATIC INVESTMENT PRODUCTS AND PRACTICES. . . . . . . . . . . . . . . . . . . . 17
Digital Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Single-Stock Leveraged and Inverse Exchange-Traded Funds. . . . . . . . . . . . . . . . . . . 20
INVESTOR ENGAGEMENT AND OUTREACH . . . . . . . . . . . . . . . . . . . . . . . . . . . . .23
RESEARCH AND INVESTOR TESTING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .25
Performance Benchmarks. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .27
Menu Complexity. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .32
Helping Investors Make Decisions About Mutual Funds Using Visual Aids. . . . . . . . . . . . 34
COVID-19. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .38
Digital Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
Challenges to Testing and Fulfilling OIAD’s Statutory Mission. . . . . . . . . . . . . . . . . . . 42
OMBUDSMAN’S REPORT. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
Ombudsman Role and Standards of Practice. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
Streamlined Communications with Retail Investors. . . . . . . . . . . . . . . . . . . . . . . . . .47
Service by the Numbers. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
Areas of Interest and Importance to Retail Investors. . . . . . . . . . . . . . . . . . . . . . . . 50
Acting In the Interest of Retail Investors. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
Ombudsman Outreach and Engagement Efforts. . . . . . . . . . . . . . . . . . . . . . . . . . 54
Objectives and Outlook. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
SUMMARY OF INVESTOR ADVISORY COMMITTEE RECOMMENDATIONS AND
SEC RESPONSES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .57
END NOTES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65

REPORT ON ACTIVITIES: FISCAL YEAR 2022

|

v

MESSAGE FROM THE OFFICE OF
THE INVESTOR ADVOCATE

I

t is my privilege to present the Office of the
Investor Advocate’s Report on Activities for
Fiscal Year 2022. This is the eighteenth in a
series of semiannual reports that stretches back to
the inception of our Office in 2014.
This year has been an annus horribilis for many
investors, and there is no denying that 2022 has seen
its share of financial challenges, with high inflation,
market volatility, global conflicts, geopolitical
tensions, (crypto) currency fluctuations, spectacular
business failures, and the threat of recession,
among a seemingly endless parade of negative
financial developments. Amid this Pandora’s Box
of uncertainties, many investors remain hopeful for
better times ahead as they struggle to fund, maintain,
or defend their nest eggs, retirement savings, and
investment portfolios, among other assets. While
past performance is no guarantee of future results,
history teaches us that this, too, shall pass.
The year 2022 has also been an eventful one for
the Office of the Investor Advocate. Certainly, the
departure of Rick Fleming, the SEC’s first Investor
Advocate, after more than eight solid years of
service, was unprecedented for a relatively new
office such as ours. Yet his legacy endures as the
Office continues its important mission and activities,
as described in this Report.
Among the notable activities we highlight in this
Report is the investor research we conducted

on the impact of fund
performance benchmarks
on investor decisionmaking. This independent
research study examined
market data and
the results of a large
behavioral experiment
sampling a general
population to understand
how fund companies
employ benchmarks and how individuals respond
to the presentation of benchmarks. Following
publication, the research study was cited repeatedly
in the Commission’s rulemaking on tailored
shareholder reports. We will continue to conduct
independent research and will seek additional
opportunities to contribute to evidence-based
rulemaking at the Commission.
Another significant activity that we address in this
Report is our recommendation to certain major
securities exchanges to consider revisiting their listing
standards for special purpose acquisition companies
(SPACs) to better protect investors during subsequent
business combination transactions between SPACs
and private operating companies—so-called
“de-SPAC transactions” (as explained in greater
detail in this Report). Our Office recommended
that those exchanges consider amending their
SPAC listing standards to prohibit consummation
of a business combination when public SPAC

REPORT ON ACTIVITIES: FISCAL YEAR 2022

|

1

shareholders exercise their conversion rights for
a majority of the shares. One of those exchanges
subsequently invited public comment regarding the
recommended conversion rights threshold.
As we look forward to the appointment of the SEC’s
second Investor Advocate, we continue to work
tirelessly on behalf of the investors we serve. Those
investors range from individual investors to large
sophisticated institutions. We strive to advocate for
all investors, particularly retail investors, whose
voices may sometimes go undetected amid the
amplifications of their institutional counterparts.

is consistent with the Commission’s three-part
mission to protect investors, facilitate capital
formation, and maintain fair, orderly, and efficient
markets. The Office of the Investor Advocate is
not limited to serving exclusively as an investor
protection advocate (its foremost function). Nor
is the Office solely an advocate for fair, efficient,
and orderly markets, although that role is essential.
Rather, the Office also is an advocate for capital
formation and its facilitation through responsible
regulation. By encompassing these three functions,
the Office’s advocacy efforts are in alignment with
the SEC’s mission.

From time to time, we are asked how the Office
of the Investor Advocate fits within the SEC’s
overarching mission. In 1937, William O. Douglas,
then the Commission’s third Chairman and later
a U.S Supreme Court justice, declared the SEC
“the investor’s advocate.” Indeed, the SEC is the
investor’s advocate writ large. Congress, however,
recognized the need to create an individual Investor
Advocate within the SEC itself. This development
does not diminish the SEC’s role as the investor’s
advocate, but rather, imbues a single identifiable
individual with the responsibility to advocate to the
SEC and to Congress for policies that would serve
the interests of investors with respect to securities
and investor protection issues. Generally, the
Investor Advocate provides a voice for investors,
assists retail investors, studies investor behavior,
and participates as a member on the SEC’s Investor
Advisory Committee. While the Investor Advocate
has an independent role within the SEC, the Office
of the Investor Advocate’s statutory mandate

Finally, the Office of the Investor Advocate could
not have accomplished the activities described
in this Report without the intensity, hard work,
and dedication of our staff—especially during the
interregnum between the departure of the first
Investor Advocate and the arrival of the next one.
All the while, our staff have continued seamlessly
to review and comment on numerous Commission
rulemakings, conduct significant investor research,
respond to investor inquiries, provide technical
assistance and logistical support to the SEC Investor
Advisory Committee, draft a Congressional
report, and generally advocate for the interests of
investors, among myriad other activities on their
behalf, as detailed in this Report. To paraphrase
President Theodore Roosevelt’s adage, we work
hard at work worth doing. We remain focused on
serving the interests of investors while we await
the appointment of the new Investor Advocate, a
welcome development that we hope to highlight in
our next report to Congress.
Respectfully,

Marc Oorloff Sharma
Chief Counsel
Office of the Investor Advocate
2

|

O F F I C E O F T H E I N V E S T O R A D V O C AT E

ADVOCACY
FOR INVESTORS

O

n June 28, 2021, the Office of the
Investor Advocate6 filed a Report on
Objectives for Fiscal Year 2022.7 That
Report on Objectives identified nine policy areas
that would be the primary focus of the Office
during Fiscal Year 2022: (1) environmental, social,
governance (ESG) disclosure; (2) Rule 10b5-1
plans; (3) capital raising alternatives; (4) equity
market structure; (5) novel-exchange traded funds;
(6) registered fund disclosure; (7) broker conduct;
(8) financial exploitation of seniors; and (9)
cryptocurrency. This section of our annual Report
on Activities describes our activities relating to
each of those policy areas from October 1, 2021
to September 30, 2022 (the Reporting Period),
with the exception of cryptocurrency, which is
discussed along with digital assets in the section on
Problematic Investment Products and Practices.

ENVIRONMENTAL, SOCIAL AND
GOVERNANCE (ESG) DISCLOSURE
As discussed in our prior reports, and mindful of
the differing viewpoints surrounding the subject
of ESG, there nonetheless is ample evidence of
demand for ESG disclosure among many investors.8
For example, a 2021 survey by a major auditing
firm found that some investors are willing to
take action if they believe certain companies are
not adequately addressing ESG issues, including
seeking to engage the company in dialogue, seeking
inclusion of ESG targets in executive pay, voting
against director appointments and/or executive

compensation agreements, and even divesting their
holdings.9 In 2020, the SEC Investor Advisory
Committee (“Investor Advisory Committee” or
“IAC”) recommended that the Commission begin
serious efforts to update public company reporting
requirements, rejecting voluntary private-sector
reporting initiatives as insufficient and inadequate
to meet investor demand for reliable, material ESG
information.10
We believe that ESG information can be decisionuseful, and we have a history of support for
high-quality, consistent, and comparable disclosure,
including ESG disclosure. Further, we have argued
that, although principles-based ESG measures are
more flexible and can generate information for
investors that is most relevant within the context of
a particular business, principles-based requirements
tend to generate disclosures that can be difficult
to compare across a variety of companies.11 For
that reason, we have advocated for reasonable
prescriptive requirements to promote comparability
wherever possible, particularly with respect to
disclosure requirements for information that is
material and objectively determinable.
In Fiscal Year 2022, the Commission issued a
number of ESG disclosure proposals relating to
issuers and funds. For instance, on March 21, 2022,
the Commission proposed certain climate-related
disclosures, partly in response to the intense and
long-standing investor interest in ESG disclosure.12

REPORT ON ACTIVITIES: FISCAL YEAR 2022

|

3

The proposal, if adopted, would require registrants
to provide certain climate-related information in
their registration statements and annual reports,
including information about climate-related
financial risks and climate-related financial metrics
in their financial statements.13 According to the
Commission, the disclosure of this information
would provide consistent, comparable, and
reliable—and therefore decision-useful—information
to investors to enable them to make informed
judgments about the impact of climate-related risks
on current and potential investments.14

Additionally, on March 25, 2022, the Commission
proposed amendments to rules and reporting forms
intended to promote consistent, comparable, and
reliable information for investors concerning funds’
and investment advisers’ incorporation of ESG
factors.18 We discussed the details of these proposed
amendments in our Report on Objectives for
Fiscal Year 2023.19 We look forward to continuing
our engagement with Division of Investment
Management staff on this rulemaking, and expect to
discuss any action taken with respect to the proposal
in a future report.

One particular area of focus in the proposal is
greenhouse gas (GHG) emissions. The proposal
would require public companies to disclose certain
information about direct GHG emissions (Scope
1) and indirect GHG emissions from purchased
electricity and other forms of energy (Scope 2).
The proposal would also require disclosure of
indirect emissions from upstream and downstream
activities in a public company’s value chain (Scope
3), if material, or if the public company has set a
GHG emissions target or goal that includes Scope 3
emissions, in absolute terms, not including offsets,
and in terms of intensity.15 The proposal would
not subject Scope 3 emissions disclosure to the
attestation requirements that would apply to Scope
1 and Scope 2 emissions.16

RULE 10B5-1 PLANS

As the Commission continues to work through this
complicated rulemaking, including the more than
4,000 comment letters submitted to date in response
to the proposed rules, we will help to ensure that
investors’ interests remain at the forefront of the
discussion, while also being mindful of the diversity
of viewpoints associated with ESG disclosure. We
further note that it is unclear at this time whether
and, if so, to what extent the recent ruling by the
U.S. Supreme Court in West Virginia v. EPA,17 in
which the Court addressed the “major questions”
doctrine, may have an impact on the Commission’s
approach to this rulemaking moving forward.

4

|

O F F I C E O F T H E I N V E S T O R A D V O C AT E

Another area of corporate disclosure that received
our attention during the Reporting Period is the
administration and composition of Rule 10b5-1
trading plans. Exchange Act Rule 10b-5 specifies
that the purchase or sale of a security is “on the
basis of” material nonpublic information, and
thus potentially prohibited insider trading, if the
purchaser or seller is aware of material nonpublic
information when making the purchase or sale.20
In 2000, the Commission adopted Rule 10b5-1,
which allows a person (often a corporate insider)
to establish a trading plan before coming into
possession of material nonpublic information.21 Rule
10b5-1 plans theoretically provide for continuous
trading over time, without influence of new
information, and thus offer traders an affirmative
defense against insider trading claims.
In reality, evidence suggests some corporate insiders
have used these plans to skirt the law and trade
on information not available to the rest of the
market.22 Critics contend that some executives have,
for example, established Rule 10b5-1 plans and
made initial trades based on material nonpublic
information already in their possession, or suddenly
canceled or revised such plans based on newlyacquired information.23 In a June 7, 2021 speech,
SEC Chair Gary Gensler noted that, in his view,
“these plans have led to real cracks in our insider

trading regime.”24 Aside from misuse of Rule
10b5-1 plans, the market’s lack of transparency
into plan details may operate to the disadvantage of
retail investors.25
On January 13, 2022, the Commission proposed
amendments to Rule 10b5-1 that would add new
conditions to the availability of the affirmative
defense under Exchange Act Rule 10b5-1(c)(1).26
The Commission also proposed, among other
things, new or amended disclosure requirements
with regard to (1) certain equity compensation
awards, (2) company insider trading policies, (3)
the adoption and termination of Rule 10b5‑1
trading arrangements and certain other trading
arrangements by directors, officers, and issuers,
and (4) Exchange Act Forms 4 and 5. On
December 14, 2022, the Commission adopted
these amendments with certain modifications in
response to public comments, including a modified
“cooling-off” period for directors and officers
before they may begin trading under a new or
modified Rule 10b5-1 plan.27 We observe that a
number of these amendments are consistent with the
recommendations made by the Investor Advisory
Committee concerning Rule 10b5-1 plans,28 and
were supported by the Investor Advocate.29
Other Commission Rulemakings
During the Reporting Period, our Office also
reviewed a number of Commission rulemakings
that concern additional aspects of public company
reporting, proxy voting, and other disclosure
requirements.
§ As discussed in our previous Report on Activities
(filed December 2021), on November 17, 2021,
the Commission adopted amendments to the
proxy rules to require the use of “universal
proxy cards” in non-exempt contested director
elections.30
§ On December 2, 2021, the Commission adopted
amendments to finalize the interim final rules

§

§

§

§

§

implementing the Holding Foreign Companies
Accountable Act (HFCAA). The HFCAA
requires the Commission to prohibit the listing
of securities for companies whose auditors, or
accounting firms engaged to assist in the audit,
are located in jurisdictions that limit the ability of
the Public Company Accounting Oversight Board
(PCAOB) to inspect the auditors.31
On December 15, 2021, the Commission
proposed amendments to modernize and improve
the disclosure requirements regarding repurchases
of an issuer’s equity securities that are registered
under Exchange Act Section 12.32
On February 10, 2022, the Commission
proposed to amend certain rules that govern
beneficial ownership reporting, including
shortening the filing deadlines for initial and
amended beneficial ownership reports filed on
Schedules 13D and 13G.33
On March 9, 2022, the Commission proposed
rules and amendments to enhance and
standardize public company disclosures regarding
cybersecurity risk management, strategy,
governance, and incident reporting.34
On June 2, 2022, the Commission adopted
amendments to mandate the electronic filing or
submission of certain documents that currently
are permitted to be filed or submitted in paper
and to mandate the use of Inline eXtensible
Business Reporting Language (Inline XBRL) in
certain instances.35
On July 13, 2022, the Commission adopted
additional amendments to the proxy rules
regarding proxy advisory firms, which are
third-party vendors hired by institutional
investors for advice and assistance in voting.36
These amendments, among other things, rescind
conditions that required that proxy voting advice
be made available to subject companies prior to
or at the time the advice is disseminated to their
clients, and that these firms provide a mechanism
by which their clients could be reasonably
expected to become aware of written responses

REPORT ON ACTIVITIES: FISCAL YEAR 2022

|

5

by companies to such advice.37 The Investor
Advocate supported these amendments, which
rescind the most problematic aspects of the
Commission’s 2020 rule amendments.38
§ Also on July 13, 2022, the Commission
proposed to revise three of the substantive bases
for exclusion (the substantial implementation
exclusion, the duplication exclusion, and the
resubmission exclusion) of shareholder proposals
under Exchange Act Rule 14a-8.39
§ After reopening the comment period for
the rulemaking on January 27, 2022, the
Commission adopted amendments on August 25,
2022 to implement Exchange Act Section 14(i),
as added by Section 953(a) of the Dodd-Frank
Act, which directs the Commission to adopt rules
requiring registrants to provide disclosure of pay
versus performance.40
§ On September 9, 2022, the Commission
adopted rule amendments implementing the
inflation adjustments required by the Jumpstart
Our Business Startups (JOBS) Act, which
increase the annual gross revenue threshold in
the definition of “emerging growth company”
and increase certain financial thresholds in
Regulation Crowdfunding.41

CAPITAL RAISING ALTERNATIVES
As discussed in our prior reports, we have had
concerns about the record numbers of special
purpose acquisition companies (SPACs) in 2020
and 2021.42 In general, a SPAC is a company with
no operations that is organized for the purpose
of merging with or acquiring one or more private
operating companies (a de-SPAC transaction) within
a certain time frame and that offers securities for
cash in a firm commitment underwritten offering of
$5 million or more in units consisting of redeemable
shares and warrants. Following its initial public
offering, a SPAC generally places all or substantially
all of the offering proceeds into a trust or escrow
account, and its shares and warrants begin trading
on a national securities exchange. The SPAC then

6

|

O F F I C E O F T H E I N V E S T O R A D V O C AT E

attempts to identify acquisition candidates and
complete a de-SPAC transaction, after which the
combined company will continue operations as a
public company.43
Unlike the traditional IPO process in which a
private operating company sells its securities at
prices arrived at through market-based discovery,
when a SPAC elects to acquire a private company,
the SPAC’s sponsors, directors, and officers
decide how to value it and how much the SPAC
will pay for it. That creates conflicts of interest
that investors may not appreciate without clear
disclosure. In addition, limitations on projections
and other forward-looking statements present
another potential difference between the
protections afforded in traditional IPOs and those
in de-SPAC transactions. The Private Securities
Litigation Reform Act of 1995 (PSLRA) provides
established, publicly-traded reporting companies
a safe harbor against private lawsuits arising
from forward-looking statements. Companies
undergoing a traditional IPO cannot avail
themselves of that safe harbor, but many argue
SPACs and their merger targets can do so. Some
companies may opt to go public through de-SPAC
transactions in part because of the assumption
the PSLRA limits investors’ ability to pursue legal
claims on overly optimistic projections. Similarly,
the fact that de-SPAC transactions may not involve
underwriters, which must operate within their
own regulatory obligations44 and reputational
risk considerations, may lead some companies
to believe that going public through a de-SPAC
transaction will allow them to engage in more
aggressive marketing.
On March 30, 2022, the Commission proposed
rules intended to enhance investor protections
in SPAC IPOs and in de-SPAC transactions.45
Specifically, the Commission proposed new rules
and amendments to existing rules and forms that, if
adopted, would:

§ Set forth specialized disclosure requirements with
respect to, among other things, compensation
paid to sponsors, conflicts of interest, dilution,
and the fairness of de-SPAC transactions;
§ Address the application of disclosure, underwriter
liability, and other provisions in connection with
de-SPAC transactions;
§ Deem any business combination transaction
involving a reporting shell company, including
a SPAC, to involve a sale of securities to
the reporting shell company’s shareholders
and amend a number of financial statement
requirements applicable to transactions involving
shell companies;
§ Amend the definition of “blank check company”
to make the liability safe harbor in the PSLRA for
forward-looking statements, such as projections,
unavailable in filings by SPACs and certain other
blank check companies;
§ Update the Commission’s guidance regarding the
use of projections in Commission filings generally
and require additional disclosure regarding
projections when used in connection with
de-SPAC transactions; and
§ Establish a new safe harbor under the Investment
Company Act of 1940 that would provide that a
SPAC that satisfies the conditions of the proposed
rule would not be deemed to be an investment
company under that Act.
In the proposing release, the Commission noted
the concerns and recommendations of the Investor
Advisory Committee regarding SPACs.46 While the
number of SPAC IPOs has declined in 2022,47 we
continue to believe that investors would benefit
from enhanced disclosure requirements and other
investor protections in SPAC IPOs and in de-SPAC
transactions. We look forward to working with
Commission staff as they evaluate comments on the
proposed rules and as they consider recommending
additional action in this area.

Relatedly, in reviewing the Commission’s proposal,
our Office evaluated the role of other gatekeepers
that help provide retail investors with access to
SPACs. As a result of our evaluation, on April
21, 2022, our Office sent recommendations to
the New York Stock Exchange LLC (“NYSE”)
and the Nasdaq Stock Market LLC (“Nasdaq”),
encouraging them to revisit their respective
exchanges’ listing standards for SPACs to better
protect investors during de-SPAC transactions.48
Specifically, our Office recommended that the
exchanges amend their SPAC listing standards to
prohibit consummation of a business combination
when public SPAC shareholders exercise their
conversion rights for a majority of the shares.
Nasdaq subsequently invited public comment over
the proposal to adopt the recommended conversion
rights threshold.49

EQUITY MARKET STRUCTURE
During the Reporting Period, the Commission
continued to take action on many aspects of the
equity market.
In August 2021, the Commission approved a
proposal from the exchanges and the Financial
Industry Regulatory Authority (FINRA) to
modernize the governance of National Market
System (NMS) plans that produce public
consolidated equity market data and that
disseminate trade and quote data from trading
venues.50 This new governance structure could
reduce inherent conflicts of interest, in no
small part by providing for non-SRO voting
representatives on the operating committees for the
NMS plans. In July 2022, the US Court of Appeals
for the D.C. Circuit vacated the order, finding
one aspect of the plan that provided voting rights
to non-SRO entities exceeded the Commission’s
statutory authority.51 It is now incumbent upon the
exchanges and FINRA to resubmit a proposal in
keeping with the court decision.

REPORT ON ACTIVITIES: FISCAL YEAR 2022

|

7

More broadly on equity market trading data,
in February 2022, the Commission instituted
proceedings to determine whether to approve or
disapprove the SROs’ proposed fee schedule that
would modernize the overall infrastructure for the
collection, consolidation, and dissemination of
market data for NMS stocks.52 Commenters, while
acknowledging the amendments could provide
key upgrades to the content and infrastructure for
“core data” consolidated and widely distributed
by central securities processors (the SIP), raised
significant issues with the current proposal from the
exchanges, arguing that the fees are based on flawed
methodologies and fail to provide a cost-based
justification.53 The Commission disapproved these
proposals in September 2022.54 We look forward to
the exchanges and FINRA submitting an improved
proposal that will address commenters concerns.
On February 9, 2022, the Commission proposed
to shorten the security settlement period in the
U.S. financial markets from a two-day settlement
(referred to as T+2) to one-day (or shorter) for
transactions in U.S. equities, corporate and
municipal bonds, and unit investment trusts.55
This proposal responds to the Investor Advisory
Committee’s 2015 recommendation on the matter,56
and could reduce behind-the-scenes regulatory
requirements that may have contributed to retail
investor confusion and frustration during a period
of volatile stock trading in January 2021.57
On February 25, 2022, the Commission proposed
enhanced transparency in short selling58 following
up on the November 18, 2021 proposal to enhance
transparency in the opaque network of stock lending
and borrowing that facilitates the practice.59 The
period of volatile stock trading in January 2021, in
several cases involving companies with significant
short interest, raises a number of policy questions
around these topics. Having a repository of relevant
data could improve the Commission’s ability to
monitor this area of the market in real time. In

8

|

O F F I C E O F T H E I N V E S T O R A D V O C AT E

Fiscal Year 2023, we will continue to monitor the
Commission’s progress in considering comments on
these proposals.
There were a number of other rule proposals
from SROs that we monitored closely during the
Reporting Period.60 For example, we reviewed
a proposal from CboeBYX that made clarifying
changes related to its periodic auction mechanism,
potentially improving investor understanding of
how the novel process would work.61 We are also
monitoring the Commission’s consideration of
the 24X National Exchange LLC application for
registration as a national securities exchange, given
the novel proposal to operate continually over
twenty-four hours a day, seven days a week.62
We continue to monitor progress on the
implementation of the Commission’s Consolidated
Audit Trail (CAT), which is intended to enhance,
centralize, and generally update the regulatory data
infrastructure available to market regulators.63 Full
implementation should occur in the near future,64
and in Fiscal Year 2023, we will encourage the
Commission to use CAT data to help improve its
regulatory processes. We will also consider ways
to enhance the CAT. For example, in October
2020, the Commission sought public comment on
amendments to enhance data security for the CAT
database,65 and we continue to consider the helpful
comments provided in response to that request.

NOVEL EXCHANGE-TRADED FUNDS
As anticipated in our Report on Objectives for
Fiscal Year 2022 (published on June 28, 2021),
we continued to focus on developments in the
exchange-traded fund (ETF) marketplace during
the Reporting Period. Regulation of the ETF
market has changed dramatically in recent years,
and we remain concerned that investor protection
efforts may not necessarily be keeping pace with
the introduction of increasingly complex and risky
exchange-traded products. Without significantly

altering existing investor protection safeguards, the
Commission recently: (i) authorized the introduction
of non-transparent ETFs into the marketplace;66 (ii)
made it easier for ETF sponsors to form and operate
new leveraged and inverse ETFs;67 and (iii) paved
the way for ETF sponsors to bring to market exotic
products branded as “single-stock ETFs.”68 These
accelerating changes in the ETF marketplace present
a number of investor protection concerns and
warrant our continued scrutiny.
For decades following the Commission’s approval
of the first ETF in 1992, ETF sponsors relied
on special relief from securities laws (known as
exemptive orders) to form and operate ETFs as
investment companies.69 The approval process for
this special relief helped ensure that ETFs complied
with a number of conditions designed to protect
investors, especially retail investors. Over time,
the Commission grew comfortable enough with
traditional ETFs to allow them to form and operate
pursuant to a new rule (ETF Rule), adopted in 2019
to establish “a consistent, transparent, and efficient
regulatory framework for ETFs.”70 The ETF Rule
codified many of the conditions that were previously
included in exemptive orders, including requiring an
ETF to provide full daily portfolio transparency on
its website.71 The ETF Rule also included a provision
expressly excluding leveraged and inverse ETFs from
the rule’s scope.72 The ETF Rule’s adopting release
acknowledges that “leveraged/inverse ETFs are
complex products that serve a markedly different
investment purpose than most other ETFs,” and
indicates that it would be “premature” to permit
sponsors to form and operate leveraged and inverse
ETFs in reliance on the rule without first addressing
certain investor protection concerns.73
The Commission’s cautious approach towards
leveraged and inverse ETFs in 2019 was consistent
with many years of concern about these ETFs
from SEC staff, Commissioners, and other market
observers. The Commission ceased granting

exemptive orders to any new would-be sponsors of
leveraged and inverse ETFs in 2009.74 That same
year, the Commission’s Office of Investor Education
and Advocacy (OIEA) issued an alert “because
individual investors may be confused about the
performance objectives of leveraged and inverse
[ETFs].”75 FINRA issued a 2009 regulatory notice
reminding firms of their sales practice obligations
for leveraged and inverse ETFs, cautioning that
“inverse and leveraged ETFs that reset daily typically
are unsuitable for retail investors who plan to hold
them for longer than one trading session.”76 In
2015, the Commission sought public comment on
a broad range of issues relating to exchange-traded
products, including comment on the extent to which
individual investors understand the nature and
operation of complex exchange-traded products
such as leveraged/inverse ETFs.77 Enforcement cases
at the Commission and FINRA have demonstrated
that even investment professionals often lack a
basic understanding of these complex products.78
Market observers including media outlets, consumer
advocacy groups, and others have documented the
confusion and harm leveraged and inverse ETFs may
cause to unsuspecting retail investors.79 SEC staff
and Commissioners have routinely issued remarks
expressing concerns about these ETFs.80
Despite all of these warnings, in recent years
the Commission has encouraged increasingly
complex innovation in the ETF market without
addressing the Commission’s longstanding investor
protection concerns. After requiring daily portfolio
transparency for ETFs seeking to rely on the ETF
Rule, in 2019 the Commission granted special relief
to several non-transparent ETFs, which allowed
them to enter the ETF marketplace.81 Then in late
2020, the Commission amended the ETF Rule
to bring many leveraged and inverse ETFs within
the rule’s scope.82 At the proposal stage, these
amendments were paired with enhanced sales
practice requirements for leveraged and inverse
ETFs,83 but the final adopted amendments scrapped

REPORT ON ACTIVITIES: FISCAL YEAR 2022

|

9

such requirements.84 Finally, ETF sponsors took
advantage of the newly amended ETF Rule in
2022 to introduce ETFs that provide leveraged and
inverse returns based on the daily performance of a
single underlying stock (single-stock ETFs).85
We first highlighted the introduction of
non-transparent ETFs, also known as portfolioshielding ETFs, in our Report on Objectives
for Fiscal Year 2022.86 The goal of these ETFs
is to allow portfolio managers to pursue active
investment strategies without revealing their
portfolio holdings on a daily basis. Novel variations
on the traditional ETF arbitrage mechanism
make this possible, and there is a risk that these
variations may not function as anticipated. 87
Were non-transparent ETFs’ alternative arbitrage
mechanisms to fail, the ETFs’ share prices
could deviate from the intrinsic values of their
portfolios, widening spreads and lessening liquidity.
Non-transparent ETFs have now developed a track
record in the marketplace without encountering
these disruptions thus far, and we are cautiously
optimistic that the products will continue to function
as intended. We note, however, that these ETFs
remain unproven in times of severe market distress,
and believe the Commission should continue to
monitor their operations and the risks they may
present to investors. A lack of market demand has
somewhat mitigated our concerns, as data shows
non-transparent ETFs have captured only 1.5% of
the active ETF market as of September 30, 2022.88
Leveraged and inverse ETFs, meanwhile, continue
to present the same dangers that they threatened
when first introduced. These ETFs rebalance their
portfolios on a daily or other periodic basis in
order to maintain a constant leverage ratio, and
the resulting effects of compounding can result in
performance that differs significantly from many
investors’ expectations of how index investing
generally works.89 A leveraged/inverse ETF can
underperform a simple multiple of its index’s

10

|

O F F I C E O F T H E I N V E S T O R A D V O C AT E

performance over several days of volatile returns.90
After asserting that leveraged and inverse ETFs
should not be incorporated into the ETF Rule before
investor protection concerns about them could be
addressed,91 the Commission did exactly that in
2020.92 Years later, as even riskier ETFs continue to
be introduced, investors are still waiting for the same
investor protection concerns to be addressed.
The long-acknowledged dangers of leveraged and
inverse ETFs are amplified by single-stock ETFs,
first introduced into the marketplace during the
Reporting Period. These ETFs function much like
the leveraged and inverse ETFs discussed above,
but they aim to provide daily returns reflecting a
multiple or an inverse of the daily performance
of an underlying single stock instead of the daily
performance of an index.93 As OIEA Director Lori
Schock explains:
Investors should be aware that if they were
to hold these funds for longer than a day,
the performance of these funds may differ
significantly from the levered and/or inverse
performance of the underlying stock during
the same period of time. Additionally, unlike
traditional ETFs, or even other levered and/
or inverse ETFs, these levered and/or inverse
single-stock ETFs track the price of a single
stock rather than an index, eliminating the
benefits of diversification. Because levered
single-stock ETFs in particular amplify the
effect of price movements of the underlying
individual stocks, investors holding these
funds will experience even greater volatility
and risk than investors who hold the underlying stock itself.94
The considerable risks inherent in single-stock ETFs
has led Commissioner Caroline Crenshaw to warn
that “it would likely be challenging for an investment
professional to recommend such a product to a retail
investor while also honoring his or her fiduciary

obligations or obligations under Regulation Best
Interest.”95 Retail investors are likely to access these
ETFs via self-directed trading, however, and as
Commissioner Crenshaw noted, “While investors
can gain similar upside and downside exposures to
an equity security through the use of options and
other derivatives, single-stock ETFs are likely to be
uniquely accessible and convenient for self-directed
retail investors, in particular.”96
Cognizant of the risks of single-stock ETFs, on
December 8, 2022 the Investor Advisory Committee
hosted a panel to discuss these products.97 The
Commission continues to assess the risks of singlestock ETFs as well. Chair Gensler directed SEC staff
to study “the potential risks of complex financial
products that are listed and traded on exchanges” in
2021.98 Similarly, in 2020, then-Chair Jay Clayton
stated that SEC staff would “review the effectiveness
of the existing regulatory requirements in protecting
investors—particularly those with self-directed
accounts—who invest in leveraged/inverse products
and other complex products.”99 While we support
these efforts, we are concerned that they have not yet
resulted in tangible investor protection safeguards.
As innovation in the ETF marketplace continues to
accelerate, we look forward to working with our
colleagues to ensure that investor protection efforts
do not fall further behind.

REGISTERED FUND DISCLOSURE
During the Reporting Period, we continued to
focus on the effectiveness of disclosure provided to
investors in SEC-registered funds. As we have noted
in prior reports, such disclosure is at the heart of the
Commission’s efforts to help ensure that investors
are making thoughtful, well-informed decisions
about their investments as they save for college
expenses, look towards retirement, or plan for
other goals. The Commission and its staff strive to
provide registered fund investors with clear, concise
disclosure regarding funds’ investment strategies,
risks, costs, and other attributes.

With these considerations in mind, we note that
on October 26, 2022, the Commission finalized
significant rule and form amendments affecting the
disclosure that mutual fund and ETF shareholders
receive. This rulemaking (Tailored Shareholder
Reports) requires mutual funds and ETFs to
transmit concise and visually engaging shareholder
reports and to promote transparent and balanced
presentations of fees and expenses in investment
company advertisements.100 More specifically,
the final rule and form amendments require:
(i) shareholder reports tailored to the needs of
retail shareholders; (ii) availability of additional
information on Form N-CSR and online; (iii)
paper or online delivery of full shareholder reports
rather than notices of availability; and (iv) certain
changes to the presentation of fund fee and expense
information in advertisements. We discuss briefly
each of these requirements below. The rulemaking
utilized investor research this Office conducted on
the impact of fund performance decision-making,
and we are hopeful that that this work will
demonstrate the value of more data-driven, investortested policymaking efforts.
Shareholder Reports Tailored to
the Needs of Shareholders
The rulemaking will require mutual funds and
most ETFs to deliver concise and visually engaging
annual and semiannual reports to shareholders,
designed to highlight information that the
Commission believes is particularly important for
retail shareholders to assess and monitor their fund
investments on an ongoing basis. This information
will include—among other things—fund expenses,
performance, and portfolio holdings.101 Funds will
have the flexibility to make electronic versions of
their shareholder reports more user-friendly and
interactive.102 In addition, funds will be required
to tag the information in their shareholder reports
using Inline XBRL structured data language.103

REPORT ON ACTIVITIES: FISCAL YEAR 2022

|

11

Availability of Additional Information
Taking a layered approach to disclosure, the
rulemaking requires additional information
(relevant to financial professionals and other
investors who desire more in-depth info) to be made
available online. This information will be filed on
a semi-annual basis with the Commission as well,
on Form N-CSR.104 The information includes, for
example, the schedule of investments and other
financial statement elements. The rulemaking also
includes requirements designed to help ensure
that investors can easily reach and navigate the
information that appears online.105
Delivery of Full Shareholder Reports
The rulemaking includes amendments to exclude
mutual funds and most ETFs from the scope of
Investment Company Act Rule 30e-3. Rule 30e-3
generally permits certain registered investment
companies to satisfy delivery requirements for
shareholder reports by making these reports and
other materials available online and by providing
a notice of the reports’ online availability, instead
of providing the reports to shareholders directly.106
The amendments excluding these funds from
rule 30e-3 are intended to help ensure that more
investors will experience the benefits of the new
tailored shareholder reports.107 Fund shareholders
will directly receive the new tailored annual and
semiannual reports in paper or, if the shareholder
has so elected, electronically.
Fee and Expense Information
in Advertisements
Finally, the rulemaking includes amendments
requiring mutual funds, ETFs, and other types of
funds to disclose fees and expenses in advertisements
and sales literature in a manner consistent with
relevant prospectus fee table presentations.108 The
fee and expense information presented must also be
reasonably current.109 Additionally, the rulemaking
addresses representations of fees and expenses that
could be materially misleading.110

12

|

O F F I C E O F T H E I N V E S T O R A D V O C AT E

The Tailored Shareholder Reports rulemaking
had set forth additional disclosure changes at the
proposal stage, which ultimately were not adopted.
Perhaps most significantly, the proposed rulemaking
would have provided a new alternative approach to
satisfy prospectus delivery requirements for existing
fund investors.111 New investors would have received
a fund prospectus in connection with their initial
investment in a fund, as they currently do, but funds
could have opted into an alternative approach under
which they would not deliver annual prospectus
updates to investors thereafter.112 The proposed
framework would instead have relied on shareholder
reports and timely notifications to shareholders
to keep investors informed about their fund
investments. Additionally, the proposed rulemaking
would have made certain changes to the funds’
prospectus disclosure requirements related to fees,
expenses, and risks.113 The Commission indicated
in its adopting release that, in light of the comments
received related to these proposed changes, the
changes would merit further consideration and
would not be adopted at this time.
We believe the disclosure changes that have been
adopted will help investors more easily digest the
information they need to make informed investment
choices, and we support the Division of Investment
Management’s (IM’s) thoughtful approach to this
rulemaking. We also agree with the decision to
consider further the proposed disclosure changes
to prospectus delivery requirements and prospectus
fee, expense, and risk information before any such
changes are finalized. In particular, we recognize the
importance of comparability across the disclosure
documents that investors receive, and hope that
any final action in these areas will make it easier
for investors to compare their current investment
choices to alternative opportunities.
In addition to the substance of the rulemaking, we
are encouraged that IM incorporated the investor
research conducted by our Office into the process

of developing the final rule and form amendments.
As discussed more fully in the Research and
Investor Testing section of this Report, the Tailored
Shareholder Reports rulemaking utilized this
research when considering investor preferences
and behaviors in response to fund disclosure.
The adopting release indicates that SEC staff will
“evaluate investor preferences and behaviors
as they evolve in the future, including through
mechanisms such as investor testing and investor
surveys where appropriate, taking into account
relevant developments in connection with fund
practices, investors’ preferences, the fund industry,
and financial markets in connection with any future
regulatory initiatives.”114 This Office has long
championed the use of investor testing to inform
rulemaking initiatives, particularly those initiatives
involving changes to disclosures provided to retail
investors, and we look forward to working with our
Commission colleagues to continue this progress.

BROKER CONDUCT
Since the implementation of Regulation Best
Interest (Reg BI) in 2020, we have monitored how
the Commission and FINRA have used the new
regulatory tools to address unethical or abusive
conduct in the brokerage business. As our Office
stated at the time, Reg BI appears to be a step
in the right direction because it includes several
improvements over the suitability standard for
broker-dealers.115 However, the utility of Reg BI will
ultimately depend upon how it is enforced by the
Commission and FINRA. We continue to monitor
its enforcement on behalf of investors.
We are also reviewing the comments received on
the Commission’s re-proposal of amendments to
an existing exemption for certain “exchange-only”
brokers from membership in FINRA.116 Narrowing
the exemption would extend FINRA oversight to
potentially dozens of broker-dealers that currently
rely on the exemption, and could potentially help

protect investors by increasing SRO oversight of
these brokers’ cross-market trading activity.
More generally, we have monitored FINRA’s
rulemaking efforts to protect retail investors and
were encouraged to see the Commission approve
FINRA’s proposal to enhance Rule 2165, governing
the financial exploitation of specified adults in
January 2022, as discussed in more detail below.117
These amendments could benefit investors because
they grant additional time for brokerage firms to
resolve matters of suspected financial exploitation,
and for adult protective service agencies, state
regulators, and law enforcement to conduct
thorough investigations.
More recently, FINRA submitted a proposal to
release information on BrokerCheck related to
a brokerage firm’s designation as a “Restricted
Firm” under FINRA Rule 4111 (Restricted
Firm Obligations), which targets firms with a
disproportionate history of misconduct relative
to similarly sized peers.118 As proposed, this
amendment would allow FINRA to release
information on BrokerCheck as to whether a
particular firm is currently designated as a Restricted
Firm pursuant to Rule 4111. This information
could be useful to investors that use BrokerCheck
to evaluate brokers, and we continue to review
the comments received by the Commission as it
evaluates this proposal.
We continue to review other initiatives by FINRA
that remain outstanding. For example, in March
2022, FINRA requested comment on sales practice
obligations for complex products and options.119
As FINRA noted in the release, regulatory concerns
arise when investors trade complex products without
understanding their unique characteristics and risks,
and it appears appropriate for FINRA to consider
whether there may be more effective practices for
brokers that deal with retail investors.

REPORT ON ACTIVITIES: FISCAL YEAR 2022

|

13

FINANCIAL EXPLOITATION OF
SENIOR INVESTORS
On January 31, 2022, the Commission approved
amendments to FINRA Rule 2165 (Financial
Exploitation of Specified Adults).120 Prior to the
rule change, Rule 2165 permitted a brokerage
firm to place a temporary hold on a disbursement
from the account of a “specified adult” customer
for up to 25 business days if the criteria of the
rule are satisfied. A “specified adult” is defined
as someone age 65 and older, or age 18 and
older if the member firm reasonably believes that
a mental or physical impairment has rendered
the person incapable of protecting their own
interests. As amended, FINRA Rule 2165 now
permits firms to: (1) place a temporary hold on
securities transactions, subject to the same terms
and restrictions applicable to a temporary hold on
disbursements of funds or securities; and (2) extend
a temporary hold for an additional 30 business
days, if the brokerage firm reports the matter to a
state regulator or agency of competent jurisdiction,
or a court of competent jurisdiction.
Also relevant for efforts to combat the financial
exploitation of senior investors is a bill pending
before the House Committee on Financial Services
(H.R. 7923—Investor Justice Act of 2022).121 If
enacted, the bill would establish grants for qualified
investor advocacy clinics associated with a law
school or a tax-exempt organization to provide
free legal representation to investors with securities
arbitration and mediation claims pending before
a registered national securities association. Such
investor advocacy clinics frequently cater to
senior investors, including those from minority
and underserved communities who may lack
the resources to pursue securities arbitration or
mediation claims on their own. On June 9, 2022, the
Investor Advisory Committee recommended that the
Commission support this pending legislation.122 Also
on June 9, 2022, the Investor Advisory Committee

14

|

O F F I C E O F T H E I N V E S T O R A D V O C AT E

issued a related recommendation supporting the
funding of the qualified investor advocacy clinics as
proposed in H.R. 7923. 123
Additionally, during the Reporting Period, the
Office of the Investor Advocate hosted the first-ever
SEC-North American Securities Administrators
Association (NASAA) roundtable featuring
AARP, to explore financial topics related to older
investors, including the financial exploitation of
senior investors. This event allowed the SEC to hear
directly from a diverse group of older, primarily
retail investors, and to better anticipate that
community’s needs in the future.

ACCOUNTING AND AUDITING
The Public Company Accounting Oversight Board
(PCAOB) has launched an ambitious plan to
overhaul audit standards, test the recent agreement
with Chinese regulators on inspecting foreign
audit firms, and shake up its management ranks.
Recently, PCAOB opened for public comment its
revisions to the attestation standards originally
adopted on an interim basis from 2003 Association
of International Certified Professional Accountants
(AICPA) standards.124 We expect PCAOB to address
audit quality standards next. PCAOB has also
reconstituted its advisory groups,125 which have
begun deliberations, and has appointed a new
Investor Advocate, Saba Qamar,126 as well as a new
Director of Communications and Engagement,
Kent Bonham.127 Meanwhile, a recruitment search
is underway for a new Director of Enforcement and
Investigations.128 In addition, PCAOB has begun
to implement the Holding Foreign Companies
Accountable Act (HFCAA) and its regulations, with
numerous foreign companies having been identified
conclusively by the SEC.129 We are monitoring
legislative developments, which, if enacted, would
reduce the HFCAA time period required for
delisting from three to two years.130

Similar to our interaction with PCAOB, we monitor
actions of the Financial Accounting Standards
Board (FASB) and auditing and accounting
policies at the Commission. On October 22,
2022, the Commission adopted a rulemaking
for listing standards of companies to implement
their own policies for clawing back erroneous
compensation.131 An important development for
the rulemaking is the guidance issued by the U.S.
Department of Justice for corporate resolutions and
the potential benefit to an issuer that has a policy
for clawing back erroneous compensation.132 We
also await the much-anticipated FASB standard
on supplier finance after an open comment period
earlier this year.133
One area of particular interest has been the
guidance from the Commission’s Office of the
Chief Accountant on the accounting for digital
asset custodial obligations, commonly known

as Staff Accounting Bulletin No. 121 (SAB
121).134 For those entities that have obligations
to safeguard digital assets135 held for platform
users, the guidance provides clear direction on
how to record both a safekeeping asset (similar
to an indemnification asset) and a safekeeping
liability. Significantly, the guidance does not suggest
recording the underlying digital assets themselves.
There are differing views on SAB 121, which has
met with mixed reactions. For instance, upon its
release, Commissioner Hester Peirce accepted the
substance of the guidance but disagreed with the
manner in which it was issued as a staff accounting
bulletin rather than as a new accounting standard
subject to public comment.136 Yet others contend
the accounting standard has hindered the take-up
of custody of digital assets by traditional financial
institutions because, under that standard, bank
custodians may have their safekeeping assets
subjected to capital and liquidity requirements.137

REPORT ON ACTIVITIES: FISCAL YEAR 2022

|

15

PROBLEMATIC INVESTMENT
PRODUCTS AND PRACTICES

A

mong other statutory duties, the Investor
Advocate is required to identify problems
that investors have with financial service
providers and investment products. Exchange
Act Section 4(g)(6)(B) mandates that the Investor
Advocate, within the annual Report on Activities,
shall provide a summary of the most serious
problems encountered by investors during the
preceding fiscal year. The statute also requires the
Investor Advocate to make recommendations for
such administrative and legislative actions as may be
appropriate to resolve those problems.138
To determine the most serious problems related to
financial service providers and investment products,
staff of the Office of the Investor Advocate reviewed
information from the following sources:
§ Investor Alerts, Tips, and Bulletins issued by the
SEC, FINRA, and the North American Securities
Administrators Association, Inc. (NASAA);

SEC143

NASAA144

§ SEC enforcement actions and FINRA disciplinary
actions;
§ NASAA’s Activity Report,139 2021 Enforcement
Report,140 and Top Investor Threats;141
§ Municipal Securities Regulatory Board’s Annual
Letter to the Office of the Investor Advocate
identifying areas of concern in the municipal
securities market;
§ The SEC Division of Examinations’ 2022
Examination Priorities;142
§ SEC and SRO staff reports providing guidance and
interpretations relating to investment products;
§ Discussions with SRO staff; and
§ Commissioner remarks.
The table below lists certain potentially problematic
products or practices during Fiscal Year 2022 as
reported by these sources. Although not exhaustive,
the lists reflect some of the concerns of these
organizations. Details regarding these products and
practices are available on the organizations’ websites.

FINRA145

MSRB146
Ÿ Macroeconomic
Conditions

Ÿ Performance Claims

Ÿ The Metaverse

Ÿ Financial Fragility

Ÿ Social Media and
Investment Fraud

Ÿ Finfluencers

Ÿ Victim Blaming in
Financial Fraud

Ÿ Single-Stock Leveraged
and Inverse ETFs
Ÿ Foreign Companies
Under the HFCAA

Ÿ Reassigned Investment
Accounts
Ÿ DeFi Defined

Ÿ Financial Literacy
Declines

Ÿ Deeply Discounted
Bonds
Ÿ Exempt Limited Bond
Offerings
Ÿ Mutual Fund Flows
Ÿ Asymmetric Information
Ÿ Evolving ESG
Considerations

REPORT ON ACTIVITIES: FISCAL YEAR 2022

|

17

Each of the products and practices listed above
represents an area of concern for investors during
the Reporting Period. Based on our review of
the resources described above and consultations
with knowledgeable practitioners, we profile the
following two areas of concern: digital assets;
and single stock leveraged and inverse ETFs.
Previous reports have highlighted other issues,
including payment for order flow,147 meme
stocks,148 SPACs,149 reverse factoring, dual-class
share structures, the LIBOR transition, initial coin
offerings, binary options, public non-traded REITS,
municipal market disclosure practices, belowminimum denomination positions in municipal
securities, Simple Agreements for Future Equity
in crowdfunding investments,150 the new-issue
process for investment-grade corporate bonds, and
leveraged and inverse exchange-traded funds.

DIGITAL ASSETS
The digital asset market, which includes
cryptocurrencies, continues to evolve and expand
into what is emerging as a new asset class. Despite
a bear market in 2022, developers continue to
innovate and bring new crypto products to market.
Indeed, recent market conditions have tested
the confidence of market participants, and the
resulting fallout has perpetuated bankruptcies,
restructurings, and investor class actions in the
digital asset space.
We have advocated consistently for digital platforms
to register as exchanges with the Commission as
an investor protection measure. In our Report on
Objectives for Fiscal Year 2022 (published on June
28, 2021), we warned that the lack of regulation
of cryptocurrency exchanges could result in broad
harm to investors.151 We indicated that because so
many crypto assets trade on unregulated exchanges,
there is no government oversight of their trading

18

|

O F F I C E O F T H E I N V E S T O R A D V O C AT E

rules, that these unregulated trading platforms can
unfairly discriminate among their users, and that
the platforms could have significant undisclosed
conflicts of interest.152 Absent registration, these
digital asset platforms lack the same integrity as
that provided by the regulated national securities
exchanges.
Underscoring similar concerns, in a November
16, 2022 speech, Commissioner Jaime Lizárraga
pondered whether “the digital asset market”
has “truly developed into a viable alternative to
traditional finance” and whether it offers “genuine
financial inclusivity and robust protections for
digital asset purchasers and investors.” 153 He
concluded that, “as of now, and despite the best
intentions of many, the answer is no.” 154 While
some believe that existing regulations and guidance
are adequate to address infractions in the digital
asset marketplace, others consider attempts to
enforce such regulations to constitute so-called
“regulation-by-enforcement.” Commissioner Hester
Peirce observed in a November 10, 2022 public
interview that the “lack of regulatory authority”
in the digital asset space “is problematic” and such
“ambiguity has not served the American public well
either.”155 The ongoing upheavals in the digital asset
marketplace may generate sufficient momentum
for legislation or additional regulatory guidance to
help ensure a clear and comprehensive regulatory
framework for digital assets.
As the industry matures, we expect more
digital asset platforms to pursue registration as
national securities exchanges, many crypto asset
transactions to be registered with regulators,
and dozens of fintech firms to register as broker
dealers, intermediaries, and custodians. It is our
view that registration is the natural evolution of the
digital asset market in terms of providing financial

legitimacy, protecting investors, and facilitating
capital formation. As with traditional financial
products and practices, we believe that regulation
begets confidence, confers a degree of investor
protection and, by doing so, enhances trust in the
system and thereby promotes capital formation.
The Commission has ramped up its efforts to police
violations in the digital asset market. Notably, the
Commission, along with thirty-two States, pursued
action against digital asset platform BlockFi for
violating the registration and antifraud provisions
of the Securities Act of 1933 and the registration
provisions of the Investment Company Act of
1940.156 As a result of this action, BlockFi agreed
to bring its business into compliance with the
Investment Company Act.157 Although the recent
bankruptcy filing of BlockFi may significantly
impact its business, that development will
not diminish the significance of the action the
Commission took against the platform.158
The Commission has also been building up its digital
asset expertise. The Division of Corporation Finance
recently announced the creation of a new disclosure
office designated the Office of Crypto Assets.159 The
Division of Enforcement has doubled the number
of staff in its Crypto Assets and Cyber Unit, which
is under new leadership.160 The Commission’s hive
for digital asset regulation is its Strategic Hub for
Innovation and Financial Technology (FinHub),
which continues to grow as more resources are
devoted to its important efforts.161 We support the
Commission’s focus on strengthening its resources
to address matters associated with digital assets, and
we believe that, ultimately, all Commission staff
should become familiar with and trained to handle
digital asset matters across divisions and offices on a
multidisciplinary basis.

Beyond the Commission, we take notice of efforts
across federal agencies, States, and standard setters
in the digital asset space. For example, FASB has set
out a path to develop a new accounting standard
for one segment of the digital asset market, crypto
assets.162 The Department of Treasury has issued
three reports pursuant to Executive Order 14067—
“Ensuring Responsible Development of Digital
Assets.”163 Those reports were released for public
comment and the next steps will involve formulating
any changes to policy.164 Enforcement has broadened
with recent coordinated actions by eight States’
attorneys general against a particular crypto lending
platform.165 The pursuit of remedies has not been
limited to public actions, however. In the first half
of 2022, securities class actions against digital asset
companies, their directors, and their officers have
surged as investors endure a deep bear market and
so-called crypto winter.166
As the market for digital assets continues to
evolve, new developments seem to emerge on
a regular basis. The FTX situation is a recent
example. Although the collapse of FTX occurred
after the Reporting Period, we cannot ignore the
magnitude of its demise and its implications for
the overall digital asset market. Once the fourth
largest digital asset platform by volume, FTX has
filed for bankruptcy, a pivotal event in the industry
with serious ramifications for the regulation of
digital asset platforms going forward. While we
agree that retail investors have a responsibility to
conduct basic due diligence and to understand any
financial product before investing in that product,
doing so does not diminish the necessity for a
robust regulatory framework for digital assets, be
it the current regulatory regime or an entirely new
regulatory ecosystem for the asset class. It is our
expectation that the FTX collapse will accelerate the

REPORT ON ACTIVITIES: FISCAL YEAR 2022

|

19

shift toward registration of digital asset platforms,
which we believe would not only foster greater
innovation and capital formation, but also enhance
investor protection in the digital asset marketplace.

SINGLE-STOCK LEVERAGED
AND INVERSE ETFS
As discussed earlier in the Advocacy for Investors
section of this Report, single-stock ETFs entered the
marketplace for the first time during the Reporting
Period. These products can be problematic for
retail investors for several reasons. First, by design,
even more “traditional” index-based leveraged
ETFs produce more dramatic swings in daily
returns than the indexes underlying those ETFs.
A hypothetical 2x ETF with underlying index
ABC, for example, would typically lose 40% of
its value on a day where the ABC index decreases

20

|

O F F I C E O F T H E I N V E S T O R A D V O C AT E

by 20%. Second, while the volatility of an indexbased leveraged ETF may be somewhat mitigated
by a diversified collection of underlying securities
(some of which may increase in value while others
decrease), a single-stock ETF’s performance is
entirely dependent on the movement of just one
security. This makes single-stock ETFs even more
volatile than most leveraged ETFs. Third, volatility
makes these products function differently than
many investors may reasonably expect. If our
hypothetical ABC index increases by 4% over the
course of two days, for example, a buy-and-hold
investor may expect the value of their investment
in our corresponding 2x ETF to increase by 8%
over those two days. In reality, however, the
investor may see a return significantly less than
8%, and may even incur a loss. Finally, the risks
of these ETFs are difficult to explain to investors

in a concise, engaging manner. Traditional
regulatory goals such as fully ensuring that all
material risks are disclosed and that investors are
making informed choices, therefore, are difficult to
accomplish with respect to these products.
Assume for the sake of the following example that
an investor purchases $10,000 worth of a 2x XYZ
single-stock ETF. The ETF’s stated investment
objective is to provide daily returns equal to two
times the daily performance of XYZ stock. Assume
further that the ETF’s underlying XYZ stock drops
and returns to slightly more than its original value
over the course of two days:
§ Day 1: XYZ stock decreases from $100/share to
$80/share (-20%)
§ Day 2: XYZ stock increases from $80/share to
$104/share (+30%)
The XYZ stock initially valued at $100 is now
valued at $104/share at the end of day 2, an increase
of 4%.
The investor’s $10,000 investment in the 2x XYZ
single-stock ETF, however, would change in value as
follows:
§ Day 1: $10,000 initial investment decreases by 2
x 20% (or 40%), making the investment equal
to $6,000 (i.e., the initial $10,000 lost $4,000, or
40% of $10,000)

§ Day 2: $6,000 remaining investment increases by
2 x 30% (or 60%), making the investment equal
to $9,600 (i.e., the remaining $6,000 gained
$3,600, or 60% of $6,000)
The initial $10,000 investment in the 2x XYZ
Single-Stock ETF is now valued at $9,600, a
decrease of 4%.
This example illustrates the issues that make singlestock ETFs so problematic for retail investors. First,
by design, the daily returns of the ETF were more
volatile than the performance of the underlying
stock. Second, the performance of the ETF was
based on the performance of one single security,
making extreme swings more likely. Third, the “2x”
ETF functioned differently than many investors
may reasonably expect. At the end of two days,
the underlying stock had increased 4% in value,
but rather than increasing 8% (two times 4%),
the corresponding single-stock ETF had decreased
by 4%. While it may be possible to disclose
these features of single-stock ETFs, the example
shows that it can be very difficult, incorporating
counterintuitive concepts. Advice from a registered
financial professional may help an investor who is
considering an investment in a single-stock ETF. As
noted above, however, many financial professionals
themselves do not fully understand these products167
and many retail investors may purchase these
ETFs without consulting a registered financial
professional at all.168

REPORT ON ACTIVITIES: FISCAL YEAR 2022

|

21

INVESTOR ENGAGEMENT
AND OUTREACH

T

he mission of the Office of the Investor
Advocate is to help ensure that the
concerns of investors are appropriately
considered as decisions are being made and policies
are being adopted at the Commission, at SROs,
and in Congress. As required by statute, our
Office analyzes the potential impact on investors
of proposed rules and regulations, identifies areas
in which investors would benefit from changes
in rules and regulations, and proposes policies to
resolve problems that investors have with financial
service providers and investment products, among
other things.169 This engagement with investors
more fully informs the Investor Advocate about
the impact various rules or regulations may have
on the investing public and helps us identify
emerging issues that may merit further attention by
policymakers.
To fulfill this mission, our Office conducts a
number of engagement and outreach functions
designed to engage with investors and potentially to
receive feedback about policy questions and other
important topics. During the Reporting Period, these
meetings included consultations with individual
investors, small business investors, institutional
investors, and representatives from organizations
that are comprised of, and represent the interests
of, investors as well as other market participants
and industry experts. There were also a number of
public events conducted that support this mission,
including investor roundtables, public meetings, and

academic engagement. Of particular note was the
Office’s focus on diversity, equity, inclusion, and
accessibility (DEIA), whereby we actively sought
to include the voices of minority and underserved
investors, Veterans and Military Spouses, investors
with disabilities, investors from Native American/
First Nations’ communities, older American
investors, and investors with a broad range of
epistemological philosophies.
During Fiscal Year 2022, we hosted multiple events
with investors designed to obtain their feedback
on policy-related topics, including the first-ever
SEC-North American Securities Administrators
Association (NASAA) roundtable featuring AARP, to
examine topics related to older investors. This event
allowed the SEC to hear directly from a diverse
group of older, primarily retail investors, and to
better anticipate the community’s needs in the future.
The Office of the Investor Advocate also serves as
a resource for other Divisions and Offices within
the Commission, by consulting on policy matters
and providing input relating to investor issues.
For example, in preparation for the development
of the Division of Examinations’ 2023 Exam
Priorities, we gathered together relevant groups of
investors and held confidential listening sessions
with the Division of Examination’s leadership,
which encouraged investors to reflect on issues
of importance to them (related to the SEC’s
examinations functions).

REPORT ON ACTIVITIES: FISCAL YEAR 2022

|

23

Another way in which our Office hears from
investors is through the SEC’s Investor Advisory
Committee, on which the Investor Advocate serves
as a statutory member. The IAC advises and consults
with the Commission on regulatory priorities,
including initiatives to protect investor interests,
promote investor confidence, and maintain the
integrity of the securities marketplace.170 The IAC
includes four subcommittees to help formulate
its policies and recommendations: 1) Investoras-Owner; 2) Investor-as-Purchaser; 3) Market
Structure; and 4) Disclosure (established in Fiscal
Year 2022). The IAC held four quarterly public

24

|

O F F I C E O F T H E I N V E S T O R A D V O C AT E

meetings and approved six recommendations to the
Commission in Fiscal Year 2022.
Looking ahead, the Office plans to continue to
prioritize retail investor-related engagements and
seek out broad input from the entire investor
community. In 2023, we will engage investors on
topics that are of interest to them, as well as on
the yet-to-be-determined emerging topics of the
future. We anticipate that digital assets, ESG-related
investing, and capital formation opportunities,
among other subjects, will remain on the forefront
of investors’ agenda.

RESEARCH AND
INVESTOR TESTING*

T

he Policy-Oriented Stakeholder and
Investor Testing for Innovative and Effective
Regulation—or POSITIER—initiative was
launched in 2017 to provide a toolkit to both the
Office of the Investor Advocate (OIAD) and the
Commission to better understand investors and to
increase efficacy of policymaking activities for the
benefit of investors and other stakeholders.
In designing POSITIER, we wanted to give investors
a stronger voice in policymaking at the Commission.
Generally, in rulemaking activities, the public
notice and comment process can provide important
feedback, but many of the comments submitted
tend to represent the priorities of interested parties
that oftentimes have massive resources to commit
to following, understanding, and commenting on
proposals. The general public, including households
that invest as well as households that do not yet
invest, may have a limited impact during this process
because they may find it burdensome and complex
to comment, given the legal or technical nature of
many rulemaking releases. As such, POSITIER is
designed to provide research and data that would
help the Commission identify and understand issues
that affect a broad cross section of investors and the
general public.

We have aimed to provide a panoramic view of
how investors and other stakeholders may be
affected by the Commission’s policy proposals and
better understand how investors and stakeholders
interact with the investment marketplace. The
POSITIER infrastructure can enable OIAD and
the Commission to, among other things: 1) more
thoroughly “identify areas in which investors
would benefit from changes in the regulations of
the Commission or the rules of self-regulatory
organizations”; 2) conduct pre-adoption (ex-ante)
testing of potential policies, identifying areas
in which investors would benefit from changes
in regulation, and allowing the Commission to
“analyze the potential impact on investors of
proposed regulations of the Commission, . . .
proposed rules of self-regulatory organizations . . .
and . . . to the extent practicable, propose to the
Commission changes in the regulations”; 3) conduct
post-adoption (ex-post) evaluation of policies so
that the Commission could more effectively conduct
“retrospective analysis of rules” after they are rolled
out;171 4) generate evidence for better organizational
management and overall efficacy, particularly in
the sense of “outcome” indicators of performance;
and, 5) study and understand investor dynamics
in order to serve as an early warning system to

* The views expressed in this report on investor testing represent solely the views of the Office of Investor Research and do
not necessarily represent the views of the Office of the Investor Advocate, the Commission, the Commissioners, or any other
Commission staff. Note: figures herein are illustrative; for actual stimuli and question text, please refer to original reports.

REPORT ON ACTIVITIES: FISCAL YEAR 2022

|

25

identify vulnerabilities for investors and other
stakeholders in order to better “identify problems
that investors have with financial service providers
and investment products.” 172
As we designed POSITIER, we prioritized the
following:
§ High-quality data collection methods—
inaccurate measures of efficacy, or biased views
of investor reactions, might mislead policymakers
about the benefits or costs of different policies.
This is why we often focus on use of high-quality
data collection methods that are conducive to
population-generalizable conclusions;
§ Multi-modality data collection approaches—
recognizing that there are pros and cons to any
particular methodology, and that many research
and policy questions require multidimensional
perspectives;
§ Studying outcomes that represent meaningful
changes for investors—to ensure our work will
have an impact. For example, when thinking
about questions such as the efficacy of how
information is disclosed one might have to
consider how proposed changes impact investor
actions and whether the changes inhibit or
empower action;
§ Making our work extremely cost-effective
and rapid—so that time and money are not a
rationale for forgoing research and testing.
Over the years, we have enjoyed considerable
support at the Commission level for our work,
including the recognition that our research fills
a substantial evidence gap. While Commission
leadership may debate the best ways to create
policy to serve the public interest, POSITIER takes
an independent data-driven view and is neither
a toolkit for more regulation nor less regulation,
but rather, for what we consider to be “smarter”

26

|

O F F I C E O F T H E I N V E S T O R A D V O C AT E

regulation. Our work provides concrete steps to
help improve the usability of mandated disclosures
and study emerging financial market products, as
well as insight into the way that macroeconomic
and market trends affect investors’ finances and
decisions. We have also studied methods to more
accurately collect data from investors, which will
allow us to improve the precision of future data
collection activities and continually improve the
Commission’s perspective on how investors think
and act.
As we look to the horizon to determine how to
best position the Office of Investor Research (OIR),
OIAD, and the Commission to best serve the
interest of investors and the general public, we have
realized that the policy challenges the Commission
faces are multi-faceted and complex, and are not
purely economic-study issues, but issues that are
best addressed by combining the perspectives of
multiple fields in the social sciences. For example,
the fields of decision science, marketing, and
psychology have long considered ways to raise
individual attention to important information and
how to better engage individuals with information.
For their part, economics and finance contribute
important tools to help understand and quantify
important aspects of decision-making with
economic and financial assets. Because of the
interdisciplinary nature of our research demands,
as we have started to build out our research team,
we have sought to create a group that brings these
various disciplinary perspectives to bear on highly
complex problems. While our staffing resources
have not yet been adequate to round out a team that
investors may fully benefit from, our workgroup
has incorporated expertise and perspectives from
economics, decision science, marketing, and
psychology, providing much richer depth to the
problems we study.

Our productivity in terms of data collection and
research execution is impressive. Since POSITIER’s
founding in June of 2017, we have conducted over
40 survey research projects, dozens of experiments,
as well as nearly a dozen qualitative data collection
projects and several other projects. The POSITIER
toolkit is unique and flexible and has served as
a model for government agencies working to
implement the Evidence Act.173 This year, the
innovative nature of POSITIER was recognized
governmentwide: OIAD Chief Economist Brian
Scholl received the 2022 “Federal Evaluation
Innovator Award” from the Evaluation Officer
Council.174 This award honors one evaluation
innovator in the federal government who thinks
of creative and “outside the box” evaluation
ideas, helps design them, and sees them through
to execution. The award recognizes the fact that
POSITIER was uniquely designed to creatively and
flexibly respond to issues faced by the SEC and
investors, and ensure that these issues are
addressed using best practices in research and
evaluation science.
Several other important milestones were achieved in
our research group during 2022. These include:
§ The creation of the new Office of Investor
Research, which houses the POSITIER initiative
and our interdisciplinary research team. Created
in 2022, this office officially establishes investor
issues and investor testing as priority areas for
the Commission. With the establishment of
this office, we engaged in a long-term strategic
planning process to codify our long-term research
goals and determine how we can have the biggest
impact for investors.
§ Expansion and deepening of the research
group. Our research team currently comprises
team members with research backgrounds in

communications, decision science, economics,
marketing, and psychology.
§ Completion of a novel, rigorous investor testing
research project on mutual fund benchmarking
that proved extremely useful to the Division
of Investment Management in its rulemaking
activities, while maintaining critical independence
of OIAD’s research team.
As always, there is much more work to be done
to better serve the needs of investors and the
Commission. Looking forward, we will continue to
work to tirelessly promote the public’s participation
and trust in the investment marketplace. Using
leading edge tools of scientific research, we will
identify and analyze policies that enable the public
to make better investment decisions and reach their
goals. To that end, and as described below, our
research expansively touches on interactions among
individual investors, their decision context, and
macroeconomic trends. The rest of this year’s report
on investor testing includes elaboration on some of
the above points and presents results from several
highly impactful research projects. We conclude with
a brief discussion of ongoing challenges to our work
as well as a sketch of some future directions for our
research group.
Below we feature snapshots of several recent
research projects. Together these projects showcase
a variety of important findings about investor
decisions and demonstrate POSITIER’s ability to
flexibly adapt methodologies for the benefit of
investors.

PERFORMANCE BENCHMARKS
Historically, the Commission’s analysis of
rulemaking impact on investors has often been
constrained by a lack of input from everyday

REPORT ON ACTIVITIES: FISCAL YEAR 2022

|

27

investors. Through POSITIER, we have sought to
give the SEC an alternative method for engaging
directly with the public, and for learning what
individual investors need to make informed
investment decisions. This year, OIAD had the
opportunity to inform policy through qualitative
and quantitative testing related to mutual fund
benchmarks. This research was heavily cited in the
recently-adopted “Tailored Shareholder Reports”
rule.175 The research is described in full in the paper
“How Do Consumers Understand Investment
Quality? The Role of Performance Benchmarks.”176
Funds are required to provide comparative
information when presenting performance data in
their shareholder reports. Funds that are presenting
performance information must accompany their
performance with an “appropriate broad-based
securities market index” in annual shareholder
reports that are provided to existing investors.
The intention is to provide contextual information
that investors can use to better evaluate the
performance of the fund. Funds have the option
of presenting performance relative to one or more
additional indexes. These additional indexes can be
“broad-based,” as with the first, or more narrowly
tailored to the assets and strategy of the fund;
however, funds have considerable discretion on the
choice of benchmarks.
Ultimately the choice of benchmarks might not
make much difference if funds select different
benchmark indices that essentially provide a similar
frame of reference for the investor. At the same
time, some comment writers suggested that funds
should be able to use a narrow benchmark as their
only benchmark.
Important questions for this rulemaking are
“To what extent do benchmarks affect investor
choices?” and “Do investors prefer broad

benchmarks, narrow, or both?” These research
questions are not entirely straightforward to
answer. From the perspective of economic theory,
benchmarks do not offer a clear path to affecting
investor decisions because they presumably
contain information that is easily accessible to the
investor elsewhere. The inclusion of additional
information on the fund would seem ignorable in
many economic modeling contexts, with no clear
path to it affecting a person’s evaluation of a fund.
At the same time, given human nature, it seems
entirely possible that a fund’s performance relative
to a benchmark may make the fund seem relatively
better or worse.
To better understand how benchmarks are used
by funds and affect investor decision-making,
our research project involved four separate data
sources. First, we studied market data on funds
and their benchmarks, as well as funds’ usage
of benchmarks. Second, we conducted in-depth
one-on-one interviews with a small group of
investors that hold mutual funds, exchange traded
funds, or similar investments to help us better
understand how investors think about benchmarks.
Third, we ran a large and innovative experiment
to more scientifically understand how investor
decision-making was affected by different ways
a benchmark can be presented on a performance
graph of the type that was under consideration in
the rule proposal. Finally, we collected survey data
that helped us to better understand the preferences
and beliefs of ordinary people with respect to
benchmark presentation and usage.177
Analysis of Market Data
Our analysis of market data was important for
understanding funds’ actual choices of benchmarks
under the pre-rule regulatory framework. Our data
captures “primary” and “secondary” benchmarks,
which provide an imperfect mapping to “broad”

Figure 1: The Number of Unique Benchmarks by Type Used by Mutual Funds in Various Sectors
17
16
17

Mid-Cap Blend
Mid-Cap Value

10

Fn. Large Growth

16

12
11

Small Value

Secondary
Primary

14

Mid-Cap Growth

23

17

Small Growth

15

Fn. Large Blend

19
21

10
14
15

Small Blend
Divers. Emer. Mkts

23

18

Large Value

31

22

Large Blend

39

20

Large Growth

20
0

5

10

15

20

22

25

30

35

40

Number of broad and narrow benchmarks employed in each sector

and “narrow” indexes as described in regulatory
requirements.178 Consistent with the rules
providing funds with discretion over their choice
of benchmarks, the number of different primary
benchmarks used in a sector ranges from 10 to 22.
One important question is: do benchmarks help
investors compare performance to a meaningful
metric? Perhaps undermining this line of thinking,
we found great variety in the benchmarks that
funds use, even within a sector. The most recent
ten-year return for the best performing benchmark
for large growth funds was over 480% greater than
the returns for the poorest performing benchmark
in this sector. We found similar patterns for other
sectors. Yet, without follow-up testing, we did not
understand if benchmarks had the potential to
affect investors’ decisions.

In-Depth Interviews
To begin to explore investors’ responses, we
started with in-depth, one-on-one interviews. In
the interviews, we showed participants a mock-up
shareholder report for a hypothetical fund. We
showed participants a variety of performance
graphs with different benchmark information, in
a layered approach that allowed us to begin to
understand how their thinking might evolve with
additional benchmark information. All interviewees
commented about relative performance between
the fund and its benchmark(s) as affecting
their perception of the fund. For example,
one interviewee noted, “Clearly the fund has
outperformed the [index shown], fairly significantly
over time.” These interviews were not sufficient
evidence on their own to make strong conclusions

REPORT ON ACTIVITIES: FISCAL YEAR 2022

|

29

Figure 2: Examples of Stimuli Used in Experiment
$45,000

Imprimiis Total U.S. Market 1000 Index

$40,000

$42,815

Middlewood Materials Fund

$35,000

$35,402

$30,000
$25,000
$20,000
$15,000
$10,000
$5,000
$
2012

$50,000

2013

2014

2015

2016

2017

2018

2019

2020

2021

Imprimiis Total U.S. Market 1000 Index

$45,000

Middlewood Materials Fund

$40,000

$35,402

$35,000

$27,988

$30,000
$25,000
$20,000
$15,000
$10,000
$
2012

2013

2014

2015

2016

about the role of benchmarks in investor decisionmaking. However, they provided a preliminary
suggestion about the importance of relative
performance in determining investor evaluations of
funds, which we sought to study more directly in a
follow-up experiment.

30

|

O F F I C E O F T H E I N V E S T O R A D V O C AT E

2017

2018

2019

2020

2021

Experimental Evidence
Qualitative testing provides rich impressionistic
data, but the labor-intensive method means that
we typically can only interview a limited number
of respondents. To provide a more comprehensive
view on how benchmarks affect respondents,

we also conducted a large-scale experiment that
we designed based on the intuition gained in the
interviews. For this experiment, we recruited over
4,000 participants using a nationally representative
probability-based survey panel. Most experiments
only have a few hundred participants,179 but we
required more participants to explore several
different experimental conditions while having
enough participants in each condition for a
statistically viable sample. The experiment varied
benchmarks in presentations with the same fund to
see how benchmarks affect investor opinions and
decisions. Whether the benchmarks were broad
or narrow was also changed. Our presentations
included one, two, or no benchmarks. For
presentations with two benchmarks, one
benchmark was outperforming the fund and one
was underperforming. While having the fund
between two benchmarks may appear a special
situation, in reality, the experimental conditions we
created represent a large fraction of presentation
conditions observed in actual market data. Figure 2
illustrates features of two of our presentations: one
with a benchmark outperforming the fund and one
with a benchmark underperforming the fund.
A key finding is that providing a benchmark
that outperforms the fund has a large, negative
impact on investor perceptions. For participant
ratings of the fund on a zero to one hundred
scale, the average rating was 56 when the fund
underperformed the benchmark (i.e. benchmark
performance was better than fund performance)
versus 65 when the fund was better than the
benchmark (Figure 3). We also see that, when
given the opportunity in a choice task designed
to simulate real-world decisions, participants
invested less in the fund after viewing performance
alongside a benchmark that outperformed the
fund. These findings suggest a meaningful impact
of benchmarks on investor perceptions and
decision-making. When comparing responses

Figure 3: Average Attractiveness Ratings by
Selected Experimental Conditions
Underperforming
the benchmark

Outperforming
the benchmark

56/100

65/100

Outperforming a
broad benchmark

Outperforming a
narrow benchmark

65/100

65/100

Average subjective attractiveness ratings by selected
experimental conditions. Top pair: attractiveness rating
for fund underperforming the benchmark (i.e. benchmark
performs better than fund; left figure) vs. fund
outperforming benchmark (i.e. fund performs better
than benchmark; right figure).

for broad and narrow benchmarks, decisions
were similar whether the benchmark was broad
or narrow. We did not find any evidence that
investors differentiated between broad and narrow
benchmarks. Average ratings of the fund when
the fund outperformed the benchmark were the
same for broad and narrow benchmarks. This is
in contrast to a claim by some commenters that
the narrow benchmark is a better reference point
than the broad benchmark. The results suggest that
benchmarks can influence investor decisions.
Survey
Finally, we also collected some survey data from a
nationally representative, probability-based panel.
Our survey asked various questions, including

REPORT ON ACTIVITIES: FISCAL YEAR 2022

|

31

some measuring preferences for benchmark
information. In response to these questions,
participants expressed a preference for seeing both
broad and narrow benchmarks (Figure 4). When
shown a performance graph with two benchmarks
(a broad and a narrow), most respondents
expressed the belief that the performance graph
was a reliable source of information and not simply
designed to make the fund look good (Figure 5).
This survey data must be interpreted carefully
because participants may not have a full ability
to internalize the context of the hypothetical
situation in a non-decision-making context, but
the survey data do suggest investors’ interest in
contextualizing the fund’s performance alongside
both broad and narrow benchmark performance
information.

Using a novel, large-scale experiment with a national
sample, as well as in-depth analysis of real-world
benchmark use, our paper presents a comprehensive
set of findings on how funds use benchmarks and
how investors may react to them. While this topic
deserves further research to understand other
dimensions of how investors respond to benchmarks,
the research summarized in this paper highlights the
complex ways in which information provided by
firms affects investor perceptions and decisions.

MENU COMPLEXITY
While U.S. financial markets are extremely broad
and deep, not every investor can access every type
of investment instrument. For example, investors in
brokerage or retirement accounts may have only a
handful of mutual funds and ETFs to consider. More

Figure 4: Stated Preferences for Benchmark Presentation by Investor Type
70

66.5
59.78

60
50

43.44

40
30
20
10

15.69
11.45

13.46

17.21

18.48

20.87

11.58

6.45

Independent Investors

Both benchmarks

15.18

Retirement
Investors

Broad only

Non-Investors

Narrow only

Fund only

Percentage of each investor status group (independent investor, retirement investor, non-investor) that expressed a
preference for presentation of broad benchmark only, narrow benchmark only, fund only (no benchmarks), or both
broad and narrow benchmarks.

32

|

O F F I C E O F T H E I N V E S T O R A D V O C AT E

Figure 5: Perceptions of Performance Graphs, by Investor Type
3.46

3.5
3.0

2.67

2.84

3.38

3.23

2.91

2.5
2.0
1.5
1.0
0.5

The graph displayed was designed to
make the fund look good
Independent Investor

The displayed graph is a reliable
source of information about the fund
Retirement Investors

Non-investors

Survey respondents were shown a performance graph with two benchmarks (one broad, one narrow). Graph provides
average response by investor status group (independent investor, retirement investor, non-investor) that stated agreement
with the associated survey question (answers on a 1–5 point scale from 1=strongly disagree to 5=strongly agree).

limited choice is not necessarily bad if the choices
are well-curated for the investor, but some menus
may offer some poor options to investors. Moreover,
the fund menus themselves may be confusing to
investors in a number of ways.
A recent experimental study180 examined one
particular area of potential confusion for investors:
whether or not the complexity of evaluating tradeoffs
between features of menu items might contribute to
worse decision-making by investors. For example,
in some “low complexity” menus, investors may
face a set of choices such that one option is better in
terms of all features (e.g., fees, performance, risk),
so that worse options are quite obvious. In a high
complexity menu, the investor may need to weigh
one feature against another to make a choice that
seems right for them. To the researcher, it is not
obvious how the consumer will decide.

In an experiment we conducted, study participants
were randomly assigned menus of five index
mutual funds. The choice set here is important:
as index funds tracking the same index, the funds
have nearly identical returns and risk, but have
one important distinguishing feature: fees. Fees
can differ dramatically in this market and lead
to substantially different long-run returns even
though the pre-fee returns and risk of the funds is
substantively similar; at a 7 percent annual return
over 25 years, an initial $100,000 balance will
grow to about $400,000 for the highest fee fund we
identified versus almost $540,000 for the lowest fee
fund—a difference of about $140,000, or about 35
percent. As this example illustrates, and is widely
recognized in the household finance literature,181
the best choice among the options that the study
curated was to pick the lowest fee fund on the
menu. The menus that were curated allowed for a
fine-tuning of the complexity tradeoff on the menu.

REPORT ON ACTIVITIES: FISCAL YEAR 2022

|

33

What the paper found was quite remarkable. By
increasing from the lowest level of complexity to the
highest level, study participants paid considerably
more in fees—and, because the funds were index
funds, the extra fees offered no benefit to the
investor in terms of risk and return. This suggests
that the way menus are constructed could have
an impact on investor choices. At the same time,
few participants selected the cheapest fund on the
menu. In fact, even at the lowest level of complexity
offered, many participants paid much higher than
the optimal amount in fees. The implication here
is that investors not only may be easily confused
by complexity, but that even at the lowest levels of
complexity, investors find it difficult to choose funds
from a menu. This choice set is considered relatively
simple because in most real-world menus, the
investor would be expected to evaluate many more
dimensions of choice and many more investment
options than they did in this experiment—for
example, by evaluating the investment sectors of
different options, the different risks, returns, brands,
and so forth.
Another remarkable feature about the results from
this paper is that this complexity effect largely holds
across different subgroups. The more investmentsavvy subgroups that were examined (e.g. higher
education, higher financial literacy) tended to pay
lower fees than the less savvy groups, but in most
cases still made worse choices when they were faced
with higher levels of complexity.
While the preliminary findings of this research
paper do not aim to offer any concrete policies for
consideration, it does help to document an aspect of
the complexity of financial decisions, and could help
the Commission think more about financial literacy
interventions. The specific issue may be too subtle
to educate individual investors on, yet the findings
highlight the importance of menu construction and

34

|

O F F I C E O F T H E I N V E S T O R A D V O C AT E

thus may be informative to, for example, company
decision-makers offering retirement accounts to their
employees. These firms are often seeking to provide
retirement options for their employees, but may not
be aware of how difficult the choice environment is
for those employees. In addition to identifying this
potential concern, another important contribution
of the paper has been to develop a research
methodology for incentivized decision-making that
has enabled OIAD to pursue several additional
projects.

HELPING INVESTORS
MAKE DECISIONS ABOUT MUTUAL
FUNDS USING VISUAL AIDS
Over the past several years, OIAD has tried
to identify ways that decision aids could be
introduced into disclosures to help investors
become more aware of the importance of fees and
make it easier for investors to make good decisions
about their investments. A new OIR paper
develops a prototype for a mutual fund decision
aid. The goal of this new aid is to help investors
compare fees across funds. Motivated by other
agencies’ successful use of cost comparisons (e.g.,
the Federal Trade Commission’s “Energy Guide”
cost rating scale) and other academic research
on “nudges” that can assist consumer decision
making, we developed a mutual fund fee visual that
depicts the distribution of fees within a fund type.
Background Context
There has been extensive policy and academic
concern that investors are paying too much in
mutual fund fees.182 Investors too frequently
prioritize past performance in their selection of
mutual funds, despite decades of academic research
demonstrating that very few funds consistently
outperform the market.183, 184 Performance is an
investor’s ultimate goal, but it is also difficult to
predict: a top performing fund in one year may be

mediocre or low-performing in the next. By contrast,
fees are easy to predict and have an enormous impact
on investors’ long run investment performance.185
Because of the investor emphasis on returns,186
policymakers have introduced specific disclosure
statements or guidance such as a warning that
“Past performance is no guarantee of future
results.” Yet, buried in a long financial document
and extensive fine print, these textual statements
may go unnoticed by investors. Even if disclosure
statements are noticed, they may not be understood.
These labels may not be sufficient to help investors
overcome their deep-rooted biases toward past
investment performance in decision-making.
Additional efforts to encourage consumers to use
mutual fund costs in their decisions by providing
simplified prospectus documents have also shown

less than hoped-for results across a range of tests
from the academic community.187 Given that
performance remains a central focus with fees too
infrequently considered, we developed a prototype
decision aid that we hoped would lead consumers
to consider fees in their decisions. We then tested
whether the aid was more effective than legally
compliant short form disclosure documents. The
design of this visual was motivated by an existing
decision aid from the Federal Trade Commission.
The Federal Trade Commission’s Energy Guide
label helps consumers compare products’ energy
costs with a black and yellow scale that depicts the
average annual cost for that product.188 This cost
can be directly compared to another product in the
same store. In other contexts, aids of this kind have
been used to help consumers make decisions better
aligned with their preferences.189, 190

Figure 6: Participant Characteristics for Fee Visuals Study 1

47.1%

52.9%
Female

Male

41%

owned
mutual funds

36%

22.6%

20%

21.3%

45%

answered using
a desktop
18-29

30-44

45-59

60+

Ages of those able to
answer on electronic devices

55%
answered using a
smartphone or tablet

REPORT ON ACTIVITIES: FISCAL YEAR 2022

|

35

Investor Testing: Fee Visual Prototypes
When an investor is faced with a mutual fund
decision, they may not know whether 0.1%,
1%, or even 10% in annual expenses is too
much to pay. Visuals that convey costs may help
investors—in the moment and without having
to do more research—understand that picking
the wrong fund might end up costing more than
necessary. Academic literature has demonstrated
that visuals provide the most benefit when they
speak to a decision maker’s goals, provide relative
comparisons between options, and provide
information with numbers that convey impact.191
This research tests whether a mutual fund fee
visual, like visual decision aids in other domains,
can have a positive impact on investment decisions.
To test a prototype fee visual, we conducted three
interrelated studies on nationally representative
samples in which investors received mutual fund
performance information and fee information with
summary prospectus documents that meet current
disclosure requirements and decided how to invest
money across several funds.

Additionally, some of the participants would view
the prototype fee visual. Figure 7 provides a sample
fee visual for one of the anonymized funds that
participants viewed. For each Low-to-High scale,
we depict the range of mutual fund expenses for a
particular fund sector (S&P 500 index funds, in this
case), with fund fees above the median shaded in red
to both serve as a warning about the fee’s relative
level and to capture attention, prompting decision
makers to think about fees in general. In this
example, fees are depicted in dollar amounts, rather
than basis points, to help convey the impact that fees
could have on financial goals. Using an experimental
methodology developed in our other research, the
participants were asked to choose from menus in
which they should have a preference for minimizing
fees as much as possible, because the choices we
asked them to choose between only differed on cost.
We measured the fees that investors would pay over
the next year, assuming they held the funds for that
period. Across our studies, we consistently observed
that when investors saw the fee visuals, they invested
more money in the less-expensive funds.

Figure 7: Sample Fee Visual Graphic
This fund: Lincoln
Fees: $2,013.72*
...per $10,000 invested
now for 20 years

Class: S&P500
Index Funds

36

Low

Lowest fee funds in class

Average fund in class

Fees: $173.60*
...per $10,000 invested
now for 20 years

Fees: $356.31*
...per $10,000 invested
now for 20 years

|

O F F I C E O F T H E I N V E S T O R A D V O C AT E

High

* Assumes return of 5% per year for $20 years.
Note: fees calculated based on total balance, not on returns.
Returns are gross (before fees are subtracted).

Figure 8: Participant Characteristics for Fee Visual Study 2

69%
owned
mutual funds

46.1%
3%
Ages
18-29

female participants

24.3% 28.3%
Ages
30-44

Ages
45-59

44.2%

44.5%
Ages 60+

55.8%

desktop

smartphone
or tablet

Ages off those who answered online

Additional statistical tests in a follow-up study
examined whether visual element variations
impacted the visuals’ effectiveness. Figure 8
represents characteristics of the sample for one of
those studies.

summary prospectus document. If adopted by the
SEC and applied to the $25 trillion mutual fund
industry, even a modest nine basis point reduction in
fees could possibly save investors in the range of $22
billion annually.

While we observed minor differences in the
effectiveness of specific elements (e.g., scale
labeling), all fee visual variants showed significant
improvement compared to the summary prospectus
document. For example, in our first study, we
observed a 27% (approximately nine basis points)
total fee reduction for the visual condition compared
to the summary prospectus document condition. The
figure below depicts the results for the allocations
to each fund. The fee visual reduced investment
in the most expensive fund in the study (one
costing 50 basis points) and increased investment
to the least expensive fund (one costing 3 basis
points). Critically, the fee visual did not result in
less “participation.” Participants did not opt more
for a cash option (with no associated expense)
when presented with a fee visual compared to the

Looking Forward/Policy Implications
While these fee visual prototype tests were
successful, we do not claim to have identified
the optimal design. However, our results provide
an important demonstration that such decision
aids may augment disclosure documents and
help investors prioritize cost information in their
decisions. Ultimately, having more awareness of
costs will facilitate better investment decisions.

COVID-19
Investment decisions are influenced by household
balance sheets. People are more likely to invest when
they have disposable income available. Conversely,
people who have recently faced emergency shocks
may be less likely to invest, and may draw down on
investment assets in a time of need.

REPORT ON ACTIVITIES: FISCAL YEAR 2022

|

37

Figure 9: Fee Visuals Reduce Investment in Expensive Funds

35
Fee Visual

Percent of Investment

30

Prospectus
Document

25
20
15
10
5
0

0.03%

0.10%

0.25%

0.50%

Cash

Fund Basis Point Cost
This figure shows average percent allocation to each fund by condition. Fee visuals reduced allocation to the expensive
(.5%) fund and increased allocation to less expensive funds (.03% and .1%).

The COVID-19 pandemic caused a large
macroeconomic shock that potentially reverberated
through many households. Some immediate
impacts of the pandemic were that many jobs were
lost and many people were unable to get to work
safely. Aid that was made available to households
during this time may have helped with sudden
financial hardships; however, the pandemic had
other, far-reaching effects. For some households, the
pandemic may have led to lasting issues such as the
death of a breadwinning spouse.
To better understand the evolution of household
finances during this crisis, OIAD conducted
regular, monthly surveys on a wide range of topics.
Building off an initial survey of 6,000 households
in September 2019, POSITIER conducted a
nationally representative panel study from July 2020
through June 2021. This monthly panel tracked
the evolution of household perceptions, including
their finances, investment activity and health status

38

|

O F F I C E O F T H E I N V E S T O R A D V O C AT E

during the COVID-19 pandemic. These data help
shed light on how Americans fared during the crisis.
The POSITIER infrastructure and the fortuitous
collection of survey data in 2019 offered a unique
opportunity for OIAD to both paint a before-andafter picture and to rapidly launch a high frequency
survey at a time when conventional economic data
sources such as gross domestic product (GDP) were
simply too slow and infrequent to be meaningful in
such a rapidly changing environment.
The data show that the onset of the pandemic was
a difficult time for many households. The number
of households experiencing a large income drop
tripled compared with the 2019 survey. Rates of
hospitalization more than doubled. Self-reported
cases of having lost money in an investment fraud
scheme also increased with the rate of households
experiencing fraud tripling. There were also large
changes in households’ net worth with households
exposed to COVID having the greatest decreases.

Despite an increase in social sector supports for
many households, households responded to these
shocks by drawing down their savings. Those with
eight months of unemployment were twice as likely
to spend money out of savings than those that were
not unemployed during this period. Figure 11 shows
the increased likelihood of having spent money out
of savings as the number of months unemployed
increased. Concerns about being able to pay for
housing and get medical care increased as members
of households spent more time unemployed. Many
households that sold securities reported doing so to
pay for large expenses.
To evaluate the overall impact on households, we
also measured households’ self-reported financial
well-being.192 We did not see much change in this
measure over the course of the pandemic. This could
be due to social sector supports for households, or

it could suggest that the financial well-being index
we used is simply not sensitive to changes in a
household’s financial circumstances. More research is
needed to better understand this observation.
According to our data, there was also an increase
in investment trading during the pandemic. In
December 2019, 4% of households reported having
traded during that month, compared with 17% of
households in December of 2020. The increased
trading activity lasted throughout our data on the
pandemic. From the end of 2020 to June 2021, there
was a steady increase of investors reporting that
they purchased securities because they believed that
overall market returns were increasing.
POSITIER surveys enabled OIAD to evaluate the
impact that the pandemic had on investors, capital
formation, and the maintenance of fair, orderly

Figure 10: Respondents Reporting a Financial Shock, by Shock Type 2019 vs. 2020
70%

2019

63%

2020

60%
50%
43%

39%

40%
30%
20%

21%

21%

0%

9%

8%

10%

3%
Income Drop

Hospitalization

Other Unexpected
Expense

Lost Money in
Fraudulent
Investment Scheme

Estimated percent of households having experienced the respective shock in 2019 compared with 2020.

REPORT ON ACTIVITIES: FISCA

[Text truncated at 120,000 characters. The full text is on the page linked above.]

---

Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/agency%3Asec%3A7f7f0d3a60c698f7. Public record. Not legal advice.