Joint Letter on SEC Concept Release
September 24, 2019
On September 24, MFA submitted a joint letter with AIMA in response to the SEC’s Concept Release on Harmonization of Securities Offering Exemptions. In the letter, MFA and AIMA explain that the existing exempt offering framework functions well in many respects and we encourage the SEC to avoid any changes that would disrupt use of existing exemptions from registration. In particular, the current framework under Rule 506 of Regulation D is generally working well and the Associations recommend that the SEC not propose substantive changes to those rules. The Associations continue to support efforts to update and enhance the definition of “accredited investor” and better align the various sophistication thresholds in the federal securities laws. MFA and AIMA also believe the definition of “knowledgeable employee” should be updated to align the interests of adviser employees and private fund investors. Finally, as the SEC considers recommendations potentially expanding the ability of registered investment funds to invest in exempt offerings, the Associations suggest that the SEC amend the rules and positions of its staff applicable to registered funds rather than seeking changes to the exempt offering framework.