Fifth Circuit Vacates SEC Private Fund Adviser Rules

Yesterday, the private fund industry was victorious in its challenge to a package of private-fund adviser rules adopted in August 2023 by the Securities and Exchange Commission (“SEC” or “Commission”) [see National Association of Private Fund Managers et. al vs. SEC (No. 23-60471) (Fifth Cir. June 5, 2024)]. The rules, grounded in the SEC’s purported authority under Title IX of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (“Dodd-Frank”) and under general antifraud, unsuccessfully sought to prohibit, restrict, and regulate governance and operational aspects of private investment funds. As of today, the SEC has not publicly indicated if it will appeal the decision....

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20 March 2024

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Dealer Rules Face Turbulent Start: Private Funds Industry Sues The SEC

by: C. Dirk Peterson

in Client Alerts, Securities Regulation

As widely anticipated, the private funds industry sued the Securities and Exchange Commission (“SEC”) seeking the invalidation and the postponement of the compliance date of recently adopted dealer rules [National Association of Private Fund Managers v. SEC, Case No. 4:24-cv-00250 (N.D. Tex., Ft. Worth Div.) (March 18, 2024)]. The suit, filed in the business friendly Fifth Circuit, joins another suit against the SEC also seeking to vacate recently adopted private fund adviser rules. ...

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19 March 2024

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Advocating for 529 Savings Plan Legislation Supported by Clients

by: Robert J. Batson

in Legislative Updates

As a federal lobbyist, it is not every day that I have an opportunity to advocate for legislation that is supported by thousands of different companies in numerous industries. Further, it is perhaps even less likely these days to be able to work an issue that has strong bipartisan and bicameral support in Washington, DC....

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29 February 2024

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Compliance Date For Dealer Registration

by: C. Dirk Peterson

in Client Alerts, Securities Regulation

Today, the Federal Register published the newly adopted dealer registration rules, meaning certain traders (heretofore previously exempt from dealer registration) must register with the Securities and Exchange Commission (“SEC”) and become members of the Financial Industry Regulatory Authority (“FINRA”) by April 29, 2025. ...

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14 February 2024

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The SEC Significantly Expanded Its Jurisdiction Over Securities Traders By Adopting New Dealer Rules

by: C. Dirk Peterson

in Client Alerts, Securities Regulation

In the face of overwhelming and near universal industry opposition, the Securities and Exchange Commission (“SEC” or “Commission”), in a split 3-2 vote, adopted new rules designed to capture “de facto market makers” and regulate them as registered “dealers”.1 The adoption of the new dealer rules perhaps should not have been surprising when viewed cumulatively with the Commission’s equity markets concept release,2 a recent amendment to an obscure trading rule, the net effect of which will direct a class of new dealers into membership with the Financial Industry Regulatory Authority (“FINRA”),3 and dealer enforcement actions applying the Commission’s de facto market maker theory that comprises the legal principle at the center of the new rules....

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