MFA Threatens Litigation Over SEC Private Fund Adviser Proposal
Commentary by Steven Lofchie
In a public statement, Managed Funds Association President and CEO Bryan Corbett argued that the SEC’s proposal on private fund adviser requirements would be harmful to both investors and the market.
Mr. Corbett's statement followed the SEC’s Notice of an upcoming meeting to determine whether to adopt new regulations on private fund advisers under the Advisers Act (see previous coverage). Mr. Corbett said that the SEC proposal creates "sweeping changes" that "exceeded its statutory authority and lacked sufficient analysis of the impact of the rule." Mr. Corbett said that MFA intends to consider its options in response to the final rule, including potential litigation.
Commentary
One would assume the MFA would not threaten litigation unless a decision had been made to pursue that route if the SEC adopts the proposed rule in its proposed form. In addition to the SEC's proposal on private fund advisers, there are several other SEC rule proposals that would likely attract legal challenge, including, but not limited to, proposals on expanding the broker-dealer registration requirement and on climate-related disclosures.
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