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29 November 2023

Navigating the Latest SEC Rulemakings

In today's financial markets, investment managers face numerous challenges, including regulatory requirements, technology advancements, and investor demands. This year alone, the Securities and Exchange Commission (SEC) has proposed 18 new rules, with no signs of slowing down[1]. In the graph below, the Investment Adviser Association (IAA) outlines many rulemakings affecting investment advisors. Firms must stay up to date with these changes to stay compliant, in addition to remaining competitive and profitable.

Investment Adviser Association (IAA) outlines many rulemakings affecting investment advisors

Tech It Up: Conversations for the Investment Community

In a recent episode of Tech It Up, a monthly podcast by SS&C Advent, hosts Trent Berry and Jasmin Conner spoke with industry leader Karen Barr, President and CEO of the Investment Adviser Association (IAA). The group covered a wide range of important topics, including an informative discussion of the latest developments in regulations proposed by the SEC and its impact on the investment management community. The IAA advocates for fiduciary investment advisory firms, providing insights into SEC proposals and rulings. During the episode Navigating SEC Regulations, Compliance, and Trends in Investment Management, Karen delved deep into multiple rulemakings, including T+1, Private Funds, and the Custody Rule, among others.

Reactions to the Outsourcing Due Diligence Proposal  

One of the proposals discussed during the episode is the Outsourcing Due Diligence, which is intended to prevent investment advisors from outsourcing certain services without meeting six minimum due diligence requirements. You can learn more about this rulemaking in the SEC Service Provider Due Diligence and Oversight Proposal brief. While some favor the proposal, many advisors and groups argue it's unnecessary and costly. During the episode, Barr commented by saying,

“The proposal is a huge deal. It would require a lot of additional minimum requirements for due diligence, monitoring, record keeping, disclosure for ADV, and the like. It includes looking at what service providers are doing directly for you and additionally looks at their subcontracting arrangements, conflicts, and coordinating with service providers for securities law compliance as well as oversight of third-party record keeping. We think the rule would result in a sea change in vendor oversight processes and is unnecessary. Investment advisors are fiduciaries to their clients regardless of whether they outsource, and they retain their fiduciary responsibilities concerning any delegated services. So, we think the commission has sufficient tools to enforce those responsibilities.”

What’s on the Docket for 2024?
As we wind down the year and head into the holiday season, there are many potential economic headwinds on the horizon. When asked what regulations investment firms might find most challenging in 2024, Barr responded with:

“There are a huge number of consequential rulemakings coming down on investment advisors in the near term. This commission has issued dozens of potential rules that will have a consequential impact on investment advisors. We have urged the SEC to consider the interrelatedness of new rules and their cumulative impact on investment advisors and small businesses.”

Barr mentioned several proposals and rules in the pipeline, such as the custody and safeguarding of client assets, cybersecurity, data privacy, predictive analytics, and private funds. To hear more from Karen Barr on this wide-ranging and informative conversation, listen to the full episode: Navigating SEC Regulations, Compliance, and Trends in Investment Management.

You can hear more from Trent and Jasmin on SS&C Advent’s Tech It Up, a monthly podcast featuring industry leaders and influencers discussing the latest in financial technology. Each episode offers fresh perspectives and thought-provoking conversations across the wealth, asset, and alternative management landscape.


[1]Securities and Exchange Commission, Retrieved from: