The Managed Funds Association (MFA) has called on the US Securities and Exchange Commission (SEC) to reform or rescind key regulations introduced over the past four years, citing excessive costs and operational burdens for private fund managers, according to a report by Reuters.
In a letter addressed to acting SEC Chair Mark Uyeda, the MFA outlined 10 recommendations designed to streamline compliance requirements, enhance market efficiency, and alleviate regulatory constraints on private funds.
Among the proposed revisions are modifications to mandates concerning Treasury trade clearing and enhanced fund disclosures.
The hedge fund industry’s lobbying efforts come amid ongoing legal challenges to new SEC rules enacted in 2023 under Chair Gary Gensler. Several trade associations have successfully contested aspects of the regulatory overhaul in court, with further litigation pending.
One key focus of the MFA’s recommendations is the SEC’s 2023 Treasury clearing reform, which mandates broader use of clearinghouses to mitigate systemic risk in the $28.5tn Treasury market.
Last month, the SEC postponed implementation for certain cash and repo Treasury transactions by a year, phasing in the new rules by June 2026.
The MFA has called for further delays until sufficient infrastructure is in place, urging the regulator to prioritise market infrastructure improvements – such as expanded access to central clearing and cross-margining – before imposing additional clearing obligations.
The association has also requested a reassessment of the SEC’s 2023 amendments to the Form PF reporting framework, which require funds to disclose significant market stress events – including major margin calls or counterparty defaults – within 72 hours.
As private fund managers await court rulings on separate SEC rules targeting greater transparency in short selling and securities lending, the MFA has urged the regulator to scale back the volume of information funds must report. Fund managers have raised concerns about the potential impact of excessive disclosure requirements on market dynamics.
Additionally, the MFA has pressed the SEC to establish a regulatory framework for digital asset securities, ensuring that private funds can allocate capital to this evolving asset class without violating existing custody rules.
