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MFA requests comment period extension on SEC’s predictive data analytics proposals

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A coalition of alternative investment industry groups including Managed Funds Association (MFA) and the Alternative Investment Management Association (AIMA) has submitted a letter to the US Securities and Exchange Commission (SEC) requesting a 60-day extension to 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 recognise 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, MFA’s 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.

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