The Managed Funds Association (MFA), alongside five other industry groups, has initiated a legal battle against the U.S. Securities and Exchange Commission (SEC). The coalition contests the SEC’s newly instituted private fund advisers regulation. They assert that the rule extends beyond the scope of the SEC’s sanctioned power and infringes on contracts.
According to the claim document – accessible through a press release on their website, the MFA lodged the lawsuit in the U.S. Court of Appeals for the Fifth Circuit. The diverse group, representing the global asset management industry, argues that the contentious rule will precipitate increased costs, dampen competition, and curtail options for institutional investors.
Such investors include pension funds, foundations, and endowments which are likely to bear the brunt of the effects of the rule. Attorney David Adams weighed in, suggesting that the lawsuit could signal the beginning of a trend of challenges to multiple SEC rulemakings. He added that significant outcomes for the legal and financial landscape hinge on this specific case.
Further details on the lawsuit, its potential implications, and the reactions from the SEC and legal experts are available on National Law Journal’s report.