On May 19, 2026, the Securities and Exchange Commission (SEC) proposed amendments in a “Registered Offering Reform” package (the Proposal) that would make it significantly easier for public companies to raise capital through registered offerings of securities. Notably, among other changes, the Proposal would exempt all registered public offerings, including those for non-exchange traded products sold through private wealth channels such as real estate investment trusts (REITs) and business development companies (BDCs), from state blue-sky registration and qualification requirements. This preemption of state blue-sky registration requirements, if adopted as proposed, would likely alleviate the regulatory burden imposed on non-traded REITs and BDCs that elect to conduct registered public offerings of their shares significantly and expand the scope of retail investors who participate in such offerings due to the lack of separate state blue-sky suitability requirements with respect to such investors. The Proposal also seeks to modify a number of other registered offering-related items, including with respect to the eligibility of certain issuers, like registered closed-end funds and BDCs, to rely on shelf registration statements, as described more in another recent Cleary Gottlieb publication.
Continue Reading SEC Proposes Registered Offering Reform: Blue-Sky Preemption a Key Win for Non-Exchange Traded REITs and BDCsAmber V. Phillips
SEC and CFTC Jointly Propose Amendments to Reduce Form PF Reporting Burdens
By Amber V. Phillips, Ben Rosenblum & James Gordy on
On April 20, 2026, the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) (collectively, the Commissions) jointly proposed amendments to Form PF, which if passed, would increase certain reporting thresholds, eliminate certain filing and reporting obligations, and streamline various other requirements, with the goal of reducing reporting burdens while continuing to collect information needed for investor protection and systemic risk monitoring (the Proposal).
Continue Reading SEC and CFTC Jointly Propose Amendments to Reduce Form PF Reporting BurdensCalifornia Diversity Reporting Law for Venture Capital Funds Pushed to 2027 (Or Later)
California’s statute on Fair Investment Practices by Venture Capital Companies (the “VC Diversity Law”) was originally scheduled to come into effect in 2026, with an initial registration date of March 1, 2026 to self-identify as a venture capital company subject to reporting and initial substantive reports due on April 1, 2026. However, on March 17, the California Department of Financial Protection and Innovation (the “DFPI”) announced that enforcement of the VC Diversity Law would be suspended, pending rulemaking and final regulations. As a result, covered entities are no longer required to submit registrations or file reports by April 1, 2026. The DFPI plans to spend several months seeking input from industry stakeholders before beginning a year-long formal rulemaking process.
Continue Reading California Diversity Reporting Law for Venture Capital Funds Pushed to 2027 (Or Later)SEC Staff Reverses Some “Gross/Net” Marketing Rule Guidance
On Wednesday evening, the SEC Staff published two new FAQs relating to the presentation of gross and net performance under the Investment Advisers Act Marketing Rule, the sweeping 2022 overhaul of the advertising and endorsement restrictions applicable to registered investment advisers (“RIAs”). Both FAQs provide significant relief from prior Staff interpretations of the Marketing Rule and will dramatically reduce compliance burdens for RIAs in the areas of performance of individual investments and certain performance “characteristics” of portfolios and investments. The limited open questions raised by new FAQs pale in comparison to the issues RIAs faced with the prior interpretations.
Continue Reading SEC Staff Reverses Some “Gross/Net” Marketing Rule GuidanceFifth Circuit Vacates Private Fund Adviser Rules in Entirety
Posted in SEC Developments, United States
On June 5, 2024, the U.S. Court of Appeals for the Fifth Circuit issued its opinion on National Association of Private Fund Managers et. al. vs. Securities and Exchange Commission, the lawsuit brought by a group of trade associations representing the private funds industry against the Securities and Exchange Commission (“SEC” or the “Commission”) challenging the validity and enforceability of the SEC’s Private Fund Adviser Rules (“PFAR”). …
Continue Reading Fifth Circuit Vacates Private Fund Adviser Rules in Entirety
SEC Adopts Amendments to Reg S-P
By Robin M. Bergen, James R. Burns, Brant Brown, Amber V. Phillips, Rachel Gerwin & Anna Bintinger on
Posted in Cybersecurity, SEC Developments
On May 16, 2024, the Securities and Exchange Commission (the “Commission” or “SEC”) adopted a final set of amendments (the “Final Amendments”) to Regulation S-P (“Reg S-P”) to require “covered institutions,” which include SEC-registered investment advisers (“RIAs”) and broker-dealers, to adopt an incident response program for incidents involving unauthorized use of or access to customer data. The Final Amendments also require customer notification where the covered institution determines the compromise of such data could create a reasonably likely risk of substantial harm or inconvenience to an individual identified with the information.
Continue Reading SEC Adopts Amendments to Reg S-PSEC Announces Reforms for Internet Investment Advisers
On March 27, 2024, the U.S. Securities and Exchange Commission (“SEC”) announced amendments to the Internet Adviser Exemption, which permits investment advisers that provide advisory services through the internet (“Internet Investment Advisers”) to register with the SEC under the Investment Advisers Act of 1940 (“Advisers Act”) if they do not otherwise have enough assets under management to be eligible for registration.[1] The final rule seeks to address technological and industry advancements since the original Internet Adviser Exemption was adopted in 2002. The final rule also amends the interactive website requirement, eliminates the exception for advisers with de minimis non-internet clients, and imposes additional reporting requirements for Internet Investment Advisers on Form ADV.
Continue Reading SEC Announces Reforms for Internet Investment AdvisersSEC Announces “AI-Washing” Cases Against Investment Advisers
On March 18, 2024, the SEC announced two enforcement actions against investment advisers for so-called “AI-washing” and violations of the Marketing Rule. Using the playbook from the Enforcement Division’s “green-washing” cases in the ESG space, the SEC found that the two investment advisers marketed that they were using AI in certain ways, when in fact, the advisers were not.
Continue Reading SEC Announces “AI-Washing” Cases Against Investment AdvisersFinCEN Tries Again . . . to Impose AML Requirements on Investment Advisers
On February 15, 2024, the U.S. Treasury Department’s Financial Crimes Enforcement Network (“FinCEN”) released a notice of proposed rulemaking (the “Proposed Rule”)[1] that would impose anti-money laundering/countering the financing of terrorism (“AML/CFT”) compliance obligations on SEC-registered investment advisers (“RIAs”) and exempt reporting advisers (“ERAs”) pursuant to the Bank Secrecy Act (the “BSA”), taking steps to close a perceived gap in the AML/CFT defenses of the U.S. financial system. FinCEN estimates more than 15,000 RIAs and almost 6,000 ERAs may be covered by the Proposed Rule, including many advisers that are located outside the United States but have registered (or file reports) with the SEC because they have U.S. clients.
Continue Reading FinCEN Tries Again . . . to Impose AML Requirements on Investment AdvisersSEC Staff Play the Hits: 2024 Exam Priorities Focus on Private Funds, Marketing and Crypto
The U.S. Securities and Exchange Commission (“SEC”) Division of Examinations (the “Division”) released its 2024 examination priorities on October 16, 2023 (the “2024 Priorities”), launching a new release schedule to align with the fiscal year. As in the 2023 examination priorities (the “2023 Priorities”), private fund advisers received special focus, with broad topic areas spanning both the existing Staff sweeps on custody, marketing and artificial intelligence, as well as renewed scrutiny of valuations and investment processes. Despite its release causing much fanfare, there was surprisingly little overlap between the 2024 Priorities and the newly adopted Private Fund Adviser Rules; the focus on fees and expense allocation carried over from the Private Fund Adviser Rules, and the Division picks up a theme from its adopting release by taking a shot at limited partnership advisory committees (“LPACs”) and compliance with private fund governance procedures.
Continue Reading SEC Staff Play the Hits: 2024 Exam Priorities Focus on Private Funds, Marketing and Crypto