The Managed Funds Association (MFA) is urging the Commodity Futures Trading Commission (CFTC) to eliminate the requirements for private fund managers to register with both it and the Securities and Exchange Commission (SEC).
Prior to 2012, private fund managers were exempted from the dual filing when they offered investments only to sophisticated, qualified investors. That year, the CFTC rescinded that exemption. In a letter to Caroline Pham, the acting chair of the CFTC, the MFA said the dual registration is costly for both the private fund managers and their investors.
“Dual regulation is costly, inefficient, and does little to improve oversight,” Jennifer Han, MFA Chief Legal Officer, said on Tuesday. “Reinstating the exemption would eliminate redundant regulation and support capital formation and economic growth, while maintaining the CFTC’s important role overseeing the derivatives market. We look forward to working with Acting Chairman Caroline Pham to advance the Trump Administration’s goal of streamlining financial regulation.”
The association said private fund managers are already regulated by the SEC, and that mandating dual registration with the CFTC subjects them to overlapping and sometimes conflicting oversight. The dual registration does not improve oversight, the agency said but does raise costs for managers and investors while harming innovation and being “anticompetitive.”
MFA argued that the United States is one of the few countries with a dual regulatory system for private fund operators. The CFTC’s derivatives framework is not well-suited for SEC-regulated global asset managers offering private fund strategies, the association said. Additionally, restoring the exemption would correct the regulatory mismatch while supporting more efficient regulation.