MFA Submits Third Comment Letter to the SEC in Response to the Private Fund Adviser Proposal

On November 23, 2022, MFA submitted a third comment letter to the SEC in response to the Private Fund Adviser proposal. MFA offers suggested changes to the Proposed Rules that are intended to offer the Commission alternative approaches to address its policy concerns, as MFA understands them, while mitigating, at least in part, some of the negative, unintended consequences of certain of the more problematic aspects of the Proposed Rules.

MFA notes continued concern that the Commission lacks statutory authority to promulgate many of the Proposed Rules and that the Commission has not conducted a robust cost-benefit analysis that demonstrates: (i) the need for the Proposed Rules; (ii) a thorough assessment of both the costs and the benefits of the Proposed Rules and their effect on investors and capital formation; or (iii) that less costly alternatives are unavailable.4 As such, none of our comments should be construed to suggest that we or our members believe the Commission possesses such statutory authority or has conducted a proper economic analysis, even if the Proposal is modified as suggested.

MFA’s letter highlights that the best course of action would be for the Commission to withdraw the Proposed Rules in their entirety and, if the Commission desires to better understand the questions and potential concerns it raises in the release accompanying the Proposal, to conduct an in‐depth research effort before proceeding, as it has done when considering significant rules in the past.