Recommendations will expand investor access, promote capital formation, and boost U.S. economic growth
Washington, D.C. — MFA made recommendations that will strengthen U.S. capital markets in a letter to the House Financial Services Committee today. The recommendations promote capital formation, reduce regulatory burdens, and ensure both public and private markets can support economic growth and investor access.
“Strengthening public and private capital markets will drive economic growth and benefit all Americans,” said Bryan Corbett, MFA President and CEO. “MFA appreciates the Committee exploring ways to enhance the U.S. capital markets. Our recommendations will make public markets more attractive for companies, foster innovation, and enhance retirement security. U.S. capital markets must remain the strongest in the world so U.S. businesses have access to the capital they need to grow, hire, and compete.”
The MFA letter highlights how deep and liquid public and private markets support job creation, retirement security, and U.S. economic growth. The JOBS Act demonstrated how smart, bipartisan policy can expand access to capital and fuel innovation. Congress can build on those successes by implementing MFA’s principled recommendations that strengthen public and private U.S. capital markets, embrace alternative asset managers as drivers of economic growth, and maintain the important distinction between private fund and registered fund frameworks.
MFA’s recommendations include:
Investor access and participation in private markets
-
Expanding investor access to private markets. Streamlining exemptive order processes, revisiting outdated limits on private fund allocations, and fixing misleading fee disclosure rules like the Acquired Fund Fees and Expenses (AFFE) requirement will make it easier for regulated funds—such as closed-end funds and business development companies—to offer exposure to private market investments. These changes will expand access to alternative investment strategies while maintaining strong investor protections.
-
Diversifying retirement plan investment options. Providing greater clarity and flexibility for 401(k) and other defined contribution plans to include long-term alternative investments will help improve the retirement security of millions of Americans.
-
Supporting innovation in private fund structures and technologies. Private funds are exploring tokenization, blockchain-based recordkeeping, and other digital tools to improve liquidity and transparency. Fostering innovation with appropriate safeguards—not barriers—will make investing more accessible and expand access to financing for small and medium-sized businesses.
-
Updating accredited investor rules to reflect modern financial sophistication. Expanding the accredited investor definition to be based on professional credentials and experience—not just wealth thresholds—will open more private market opportunities to qualified investors while preserving essential safeguards.
Markets and company lifecycle
-
Making the IPO process more efficient. Allowing companies greater flexibility to “test the waters” with potential investors before formally filing for an IPO will help companies gauge investor interest early, reduce unnecessary costs, and encourage more businesses to enter the public markets.
-
Reducing regulatory burdens for newly public companies. Streamlining ongoing reporting requirements—such as Forms 10-Q and 10-K—and aligning disclosure obligations with materiality will ease the transition from private markets to public markets, lower compliance costs, and maintain investor protections. These reforms will make being a public issuer more attractive to U.S. businesses and expand the universe of companies accessible to individual investors.
-
Improving market conditions for small public companies. Limited access to capital and burdensome regulations makes it challenging for smaller public companies to remain public. Easing private capital formation and streamlining disclosure requirements—such as simplifying filing requirements under Regulation S-K and S-X—will improve small issuers’ ability to raise capital, reduce costs, and support growth.
-
Modernizing market structure to improve liquidity and efficiency. Current equity market rules apply uniformly across all securities, regardless of trading volume or company size. Implementing tailored reforms for smaller public companies will improve liquidity, attract institutional investors, and encourage broader research coverage.
Read the full letter here.
###
About the global alternative asset management industry
The global alternative asset management industry — including hedge funds, private credit funds, and hybrid funds — serves thousands of public and private pension funds, charitable endowments, foundations, and other global institutional investors. The industry provides portfolio diversification and risk-adjusted returns to help meet their funding obligations and return targets throughout the economic cycle.
About MFA
Managed Funds Association (MFA), based in Washington, D.C., New York City, Brussels, and London, represents the global alternative asset management industry. MFA’s mission is to advance the ability of alternative asset managers to raise capital, invest it, and generate returns for their beneficiaries. MFA advocates on behalf of its membership and convenes stakeholders to address global regulatory, operational, and business issues. MFA has more than 180 fund manager members, including traditional hedge funds, private credit funds, and hybrid funds, that employ a diverse set of investment strategies. Member firms help pension plans, university endowments, charitable foundations, and other institutional investors diversify their investments, manage risk, and generate attractive returns throughout the economic cycle.
