February 6, 2024
Contact: IAA VP of Communications & Marketing Janay Rickwalder.
By a 3-2 vote, the SEC has adopted new rules that would for the first time require dealer registration for certain private funds and certain of their advisers whose investment strategies have the effect of providing liquidity to the markets.
The IAA’s first take is that the final rules are much better than the proposal but are still very troubling.
The IAA strongly opposed the SEC’s proposal because we believe that Congress did not intend that any investment advisers acting as fiduciaries for their clients be treated as dealers for that fiduciary conduct. We offered several recommendations to limit the scope of the proposal if the SEC decided to move forward despite our broad concerns. Based on our preliminary review, we appreciate that the SEC has incorporated these recommendations and significantly narrowed the potential reach of the rules.
But the final rules will still apply to some private funds and other types of advisory clients and their advisers, and we remain concerned that this approach undermines the statutory framework for fiduciary investment advisers that Congress established with the Advisers Act.
We will carefully review the rules when they come out to determine their potential effect on our members and the Advisers Act regulatory framework.
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