Type
Published

MFA and a Coalition of Industry Groups Request Comment Period Extension for SEC Proposal on Conflicts of Interest Related to Predictive Data Analytics

Jennifer Han: “Alternative asset managers use technology to benefit investors, including pensions, foundations, and endowments. The rule, as proposed, will dramatically impair the use of data and technology to serve clients, harm investment returns, and reduce investor access to certain investment opportunities. The SEC should grant an extension to enable market participants to better assess the implications and unintended consequences of the proposal and provide thoughtful feedback.”

 

WASHINGTON, DC – Managed Funds Association (MFA) and 15 other industry groups submitted a letter today to the U.S. Securities and Exchange Commission (SEC) requesting a 60-day extension of the comment period for the proposed rules on conflicts of interest associated with the use of predictive data analytics by broker-dealers and investment advisers.

The letter highlights that the SEC failed to recognize the proposal’s unintended consequences and far-reaching implications, for investment advisers and broker-dealers’ uses of technology and for the mitigation of conflicts in accordance with investment advisers’ fiduciary duties. As a result, the signatories stress the need for significant additional time to evaluate the wide-ranging impacts of the proposal. 

“Alternative asset managers use technology to benefit investors, including pensions, foundations, and endowments,” said Jennifer Han, Chief Counsel and Head of Global Regulatory Affairs. “The rule, as proposed, will dramatically impair the use of data and technology to serve clients, harm investment returns, and reduce investor access to certain investment opportunities. The SEC should grant an extension to enable market participants to better assess the implications and unintended consequences of the proposal and provide thoughtful feedback.”

The letter also notes the unprecedented volume of rulemaking from the SEC in recent years and that an extension would provide more time to evaluate the cumulative impact of the proposed rules. The letter was signed by:

  • Managed Funds Association;
  • Alternative Investment Management Association;
  • American Council of Life Insurers;
  • American Investment Council;
  • Financial Services Institute;
  • Institute for Portfolio Alternatives;
  • Insured Retirement Institute;
  • Investment Adviser Association;
  • Investment Company Institute;
  • LSTA;
  • National Association of Insurance and Financial Advisors;
  • National Association of Investment Companies;
  • The Real Estate Roundtable;
  • Securities Industry and Financial Markets Association;
  • SIFMA Asset Management Group; and
  • U.S. Chamber of Commerce.

The joint letter is available here.


 

About the Global Alternative Asset Management Industry

The global alternative asset management industry, including hedge funds, credit funds, and crossover funds, has assets under management of $4 trillion (Q4 2022). The industry serves thousands of public and private pension funds, charitable endowments, foundations, sovereign governments, and other global institutional investors by providing portfolio diversification and risk-adjusted returns to help meet their funding obligations and return targets.

About Managed Funds Association

Managed Funds Association (MFA), based in Washington, DC, New York, Brussels, and London, represents the global alternative asset management industry. MFA’s mission is to advance the ability of alternative asset managers to raise capital, invest, and generate returns for their beneficiaries. MFA advocates on behalf of its membership and convenes stakeholders to address global regulatory, operational, and business issues. MFA has more than 170 member firms, including traditional hedge funds, credit funds, and crossover funds, that collectively manage nearly $2.2 trillion across a diverse group of investment strategies. Member firms help pension plans, university endowments, charitable foundations, and other institutional investors to diversify their investments, manage risk, and generate attractive returns over time