Dual registration with the SEC and CFTC imposes unnecessary costs on private fund managers and their investors
Washington, D.C. – MFA urged the Commodity Futures Trading Commission (CFTC) to eliminate redundant dual registration requirements for private fund managers in a letter submitted yesterday. Managers must register with both the CFTC and SEC since 2012 when the CFTC rescinded an exemption for private managers offering investments only to sophisticated, qualified investors.
“Dual regulation is costly, inefficient, and does little to improve oversight,” said Jennifer Han, MFA Chief Legal Officer. “Reinstating the exemption would eliminate redundant regulation and support capital formation and economic growth, while maintaining the CFTC’s important role overseeing the derivatives market. We look forward to working with Acting Chairman Caroline Pham to advance the Trump Administration’s goal of streamlining financial regulation.”
Private fund managers are already well-regulated by the SEC. Mandating duplicative registration with the CFTC subjects fund managers to overlapping, often conflicting, oversight regimes. This does not improve oversight, raises costs for managers and investors, is anticompetitive, and harms innovation.
The U.S. is one of the only countries with a dual regulatory system for operators of privately offered funds. The CFTC’s derivatives framework is not well-suited for SEC-regulated global asset managers offering a broad range of private fund strategies to institutional investors. Restoring the exemption would correct this regulatory mismatch, support more efficient regulation, and allow the CFTC and regulators to better allocate scarce regulatory resources to protect against fraud.
Read the full letter here.
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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.
