New Comment Deadline Set for SEC Proposals on Reg ATS and Regulation of Private Fund Advisers

The SEC reopened the comment periods for proposals to (i) expand the scope of Regulation ATS and (ii) expand the regulation of private fund advisers. As outlined in a notice in the Federal Register, comments for both proposals are now due by June 13, 2022.

Regulation ATS

As previously covered, the SEC proposed to:

1. expand the definition of "exchange" under SEA Rule 3b-16 ("Definitions of terms used in Section 3(a)(1) of the Act") to include systems that only display "trading interest" (as opposed to "orders"), including by use of "communication protocols"; and
2. remove the exemption that Regulation ATS currently provides to systems that only trade government securities.

The original comment period closed on April 18, 2022.

Private Fund Advisers

The SEC stated that the purpose of the proposal is to "enhance" the regulation of private fund advisers through a variety of new rules and amendments (see related coverage detailing the scope of the proposal). The proposal would also require all registered advisers to document in writing the annual review of their compliance policies and procedures.

The original comment period for the private fund advisers proposal closed on April 25, 2022.