26 Jan 2024

SBAI Engages with the SEC

Over the last months, we have continued to engage and meet with the US SEC on a range of proposed rules – raising specific concerns about the unintended consequences of the Safeguarding Advisory Client Assets Rule and the Predictive Analytics Rule.

  • The Safeguarding Advisory Client Assets Rule is incompatible with a wide range of foreign and domestic markets that involve instruments that cannot be custodied in accordance with the rule; will affect prime brokers’ ability provide margin finance; and will require costly renegotiation of custody and trading agreements.
  • It is unclear if the Predictive Analytics Rule is intended to apply to institutional investment managers. Its overbroad nature captures virtually any tool as a “covered technology”, with significant and unworkable compliance obligations – despite existing regulation on conflicts of interest / fiduciary duties providing safeguards already.

This follows on from our response to the SEC’s Private Fund Adviser Rule. In 2024, the SBAI will continue to maintain regular dialogue with regulators on a wide range of topics, including financial stability, ESG, markets regulation, as well as other asset management regulations.

Our efforts are supported by the Global Regulatory Committee, which is equally represented by institutional investors and asset managers.

Collaboration is at the heart of the SBAI as we bring our network of stakeholders together to discuss standards, practices, and regulation and we will continue to expand engagement with our stakeholders on regulatory matters in 2024.

SBAI Resources

  • Our Alternative Investment Standards (“Standards”) provide a framework of good practice that complement regulation in key areas including governance, disclosure, valuations, risk management, and shareholder conduct.
  • Our Toolbox of practical guidance complements the Standards and improves industry outcomes through education and standardisation for the alternative investment industry. One area of focus for guidance in 2024 will be publication of a Quarterly Fee & Expense Reporting Template to help practitioners navigate changes being instituted with new regulation in the US.


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