Managed Funds Association (MFA) has urged the Federal Trade Commission (FTC) to withdraw its proposed amendments to the Hart-Scott-Rodino (HSR) premerger notification rules, in a comment letter submitted this week.
The letter is in response to the FTC’s Notice of Proposed Rulemaking concerning “Premerger Notification; Reporting and Waiting Period Requirements.”
MFA’s letter argues that the proposed changes would impose unnecessary burdens on investment funds and other entities that routinely make HSR filings for transactions that do not raise anti-competition concerns. The changes would also drown FTC staff in filings, making the initial antitrust review of transactions less effective and efficient without providing meaningful benefits for the vast majority of transactions.
“The FTC is creating a burdensome, one-size-fits-all framework that would capture transactions regardless of whether they present antitrust concerns,” said MFA President and CEO Bryan Corbett. “The proposal disincentivises alternative asset managers from pursuing non-merger activities that promote greater competition, including holding corporate management accountable through activism and providing crucial capital to small- and medium-sized businesses. We strongly urge the FTC to withdraw this unnecessary regulatory overreach so that alternative asset managers can continue to deliver for their investors, including pensions, foundations, and endowments.”
The letter highlights that the FTC severely underestimates the costs and burdens associated with complying with the proposed amendments. MFA suggests that such constraints could deter alternative asset managers from pursuing transactions that encourage competition by requiring HSR filings, such as providing financing to startup companies. As a result, MFA calls on the FTC to withdraw the proposal. However, should the agency determine to move forward, MFA provides recommendations to mitigate some of the unintended negative consequences. These include exempting certain types of transactions from the proposed additional filing requirements and eliminating some of the more onerous and unjustified disclosure mandates.