Managed Funds Association (MFA) urged the Securities and Exchange Commission (SEC) to withdraw its Predictive Data Analytics proposal in a comment letter submitted today. MFA’s letter details how the proposal improperly places a retail investor regulatory framework on alternative asset managers who work for sophisticated, institutional investors and why that’s bad for markets and the U.S financial system.
Furthermore, MFA contends that the proposal exceeds the SEC’s authority under the Advisers Act and other applicable laws. It fails to consider less costly alternatives and does not sufficiently justify the adverse consequences it may impose on technological advancement and the industry’s overall functioning. MFA calls for the withdrawal of the proposal and encourages the SEC to engage with industry participants to conduct a proper cost-benefit analysis.
MFA highlights several key concerns, including the abandonment of full disclosure and informed consent as a means to address conflicts of interest, the overbroad definitions within the proposal, and an inadequate cost-benefit analysis. MFA argues that the proposal is arbitrary, capricious, and legally flawed. MFA suggests that the SEC should reconsider the scope and applicability of any new regulation in this area, involving industry experts in the process to ensure a more balanced approach.