Wall Street's top regulator Wednesday is set to approve rule changes aimed at banning the deceptive labeling of funds that appear to target "growth" or "value" assets or environmentally and socially conscious investments.

The vote by the U.S. Securities and Exchange Commission would update a two-decade-old "Names Rule" requiring that investment fund names match the assets they contain.

The proposal has met stiff industry opposition but financial reform advocates say billions of dollars are now invested in popular funds that may actually support fossil fuel production and do not meet the environmental, social and governance, or ESG, goals suggested by their names, which can change frequently.

"Funds can choose their own name and they can choose their investment portfolio. The rule simply asks that the two correspond," William Birdthistle, director of the SEC's Division of Investment Management, said Tuesday in congressional testimony before the final version of the proposal was released.

The SEC since 2021 has also focused on prosecuting ESG-related misconduct and "greenwashing," bringing enforcement actions and levying fines.

Under the change, funds names including terms like "growth" or "value" or that indicate ESG-driven investment decisions would have to keep 80% of their assets in the kind of investments suggested by their names - using the terms' plain-English meanings and following established industry use.

In prospectus disclosures, funds subject to the rule would also be required to define the terms they use and explain the criteria for selecting investments.

The 80% investment requirement currently applies to other fund characteristics such as risk. As a result of the change, 76% of investment funds would be subject to the "Names Rule" up from the current 60%, SEC officials said prior to the vote.

Trade organizations have attacked the proposal, first issued in May of last year, claiming its requirements would be impracticably subjective, cause confusion among investors, and encourage superficial judgments based solely on names.

In a concession to industry, the change will allow 90 days, rather than the originally proposed 30, for corrective action if funds fall out of compliance with the 80% standard.

Proponents of the change cited media reporting according to which top ESG funds actually invest in major fossil fuel producers and large shares of climate-themed investment products have proven to be out of alignment with targets set by the 2015 Paris Agreement on the climate.