MFA Supports SEC and CFTC Intention to Eliminate Duplicative Regulation

The Managed Funds Association ("MFA") urged the SEC and CFTC to advance efforts of regulatory harmonization by eliminating duplication and streamlining oversight. The letter follows a joint roundtable in which SEC and CFTC Commissioners generally agreed on the benefits of pursuing regulatory harmonization.  

In a letter to SEC Chair Paul Atkins and CFTC Acting Chair Caroline Pham, the MFA highlighted the burden of duplicative registration for SEC-registered investment advisers and CFTC-registered commodity pool operators and argued that dual compliance creates costs without corresponding investor protection benefits. The Association stressed that the Commissioners reinstate the CFTC’s former Rule 4.13(a)(4) exemption for SEC-registered advisers managing private funds for sophisticated investors. (See previous coverage.) The MFA noted that this exemption, rescinded in 2012, had successfully reduced redundancy, allowed regulators to allocate resources more effectively, and preserved oversight through existing reporting frameworks.

The MFA also pressed for broader harmonization of product regulation, trading venue definitions, and capital and margin frameworks. The association emphasized that fragmented oversight has deterred innovation in areas such as digital assets and security futures, while inconsistent custody and venue rules have created confusion for market participants. The MFA further advocated for expanded use of cross-margining programs.

The MFA argued that aligning SEC and CFTC frameworks would reduce unnecessary burdens, promote systemic resilience, and bolster U.S. competitiveness in global markets.