More SEC rules and compliance dates arriving this year

SEC registered investment advisers and funds should expect a rules lineup this year perhaps like no other in the recent history of financial regulation. Compliance dates for finalized rules covering private funds, Form PF, money market funds and fund names begin this year and into 2025, while several other rules at the proposal stage are set to be finalized. When the BoardRoom spoke with Founder and President Amy Lynch, she highlighted the Cybersecurity and ESG rules as more than likely heading toward adoption out of the gate in 2024, while others such as the Custody and Outsourcing rules will involve more debates and revisions. Ms. Lynch also pointed to the SEC’s 2024 Examination Priorities report and how several areas cited in the report have proposed rules related to them. This demonstrates that while the proposed rules are under consideration for adoption, the SEC’s Division of Examinations will be playing a role in supporting the proposal process via its exams and collection of firm data. And let’s not forget that the general election this November will motivate the current SEC administration to reach the finish line with many of its rule proposals.

For a roadmap of how the SEC will seek to enforce its new rules, look to its ramped-up exam approach for the Marketing Rule (compliance date of November 4, 2022). The SEC has only allowed a relatively short time frame for firms to meet their compliance requirements, particularly for a new rule requiring significant changes and updates. Ms. Lynch comments that the SEC’s exam and enforcement activity surrounding the Marketing Rule are the most aggressive she has seen for a new rule during her twenty-five year compliance career.

Here’s just a partial list of SEC target areas for rules currently proposed and those more recently adopted that will impact compliance in 2024 and beyond:

  • Custody Rule
  • Cybersecurity
  • ESG Disclosures
  • Outsourcing
  • Use of Predictive Data
  • Money Market Funds (finalized)
  • Names Rule (finalized)
  • Short Position and Short Activity Reporting (finalized)
  • Private Fund Rules (finalized)
  • Form PF Reporting (finalized)
  • Marketing Rule (finalized)