Roll back Gensler-era rules, private funds industry urges SEC

The Managed Funds Association is calling on the SEC to revisit several regulations introduced under former Chair Gary Gensler, arguing they impose unnecessary costs and burdens on market participants.

In a letter to Acting SEC Chair Mark Uyeda, the MFA recommended an array of policy changes, including delaying mandates for Treasury trade clearing and reducing disclosure requirements for private funds. The group argues that the current rules create inefficiencies without clear benefits.

“The SEC under the Trump administration has an opportunity to turn the page by withdrawing all outstanding proposals and revisiting policies that have been piled on over the past four years, harming markets, investors, and the economy,” the MFA wrote in its letter published Tuesday.

The group submitted its 10-point policy proposal following a series of legal skirmishes between industry and the SEC over transparency-related regulations that were installed in 2023. As Reuters noted, some trade groups have already secured key victories, including a November court decision vacating a contentious "dealer rule" governing funds operating in Treasury markets.

Push to delay Treasury trade clearing rules

One of the MFA’s central concerns is a 2023 SEC rule that would require more Treasury trades to go through clearinghouses, a measure designed to reduce systemic risk in the $28.5 trillion Treasuries market. While the SEC has already postponed implementation until 2026, the MFA argues that compliance should not be required until critical market infrastructure is in place.

“Without [expanded access to central clearing], requirements for some transactions to be centrally cleared will be counterproductive, decreasing market efficiency and resiliency by making it more difficult and expensive for investors to transact,” the letter stated.

Last month, the SEC extended the compliance deadline for some Treasury clearing requirements, responding to concerns from industry groups about how prepared the market is to operate onside.

Revisiting private fund disclosure requirements

The MFA is also seeking changes to Form PF, a rule updated in 2023 to require private funds to report events that could trigger market stress or indicate systemic risk, such as significant margin calls or counterparty defaults, within 72 hours.

The industry group argued that the current reporting requirements are overly broad and impose significant costs without providing meaningful benefits to regulators.

“New Form PF imposes unnecessary costs on market participants, without corresponding benefits to the Commission, and represents a distortion of the intended purpose of Form PF – namely, to provide the Commission and FSOC with data to assess potential systemic risk,” the MFA stated.

Additionally, the group has asked the SEC to scale back its reporting requirements for short selling and securities lending, two areas where private funds are challenging regulations in court.

Call for digital asset regulation

Beyond traditional market reforms, the MFA is urging the SEC to provide greater legal clarity on digital asset securities, ensuring that private funds can invest in them without violating custody requirements.

The letter asked the commission to confirm that private funds may engage in digital asset transactions without exposing banks and broker-dealers to punitive capital requirements. While the SEC has been working on guidance for crypto companies and investors, the MFA argued that regulatory uncertainty has made it difficult for private fund companies to navigate the digital asset space.

“We seek a framework that provides legal certainty to the industry, whether through guidance, rulemaking, or Congressional action, so that market participants understand the rules of the road and investors understand the risks and are adequately protected,” the letter stated.