Targeted reforms will direct agency resources toward genuine antitrust risks and reduce costs for investors
Washington, D.C. — MFA urged the Federal Trade Commission (FTC) and Department of Justice (DOJ) to reform the Hart-Scott-Rodino (HSR) premerger notification process by exempting filings for minority investments that pose no competitive risk in a comment letter submitted today. The letter responds to a Request for Information seeking public input on improving the premerger notification and reporting form.
The HSR framework currently requires fund managers to file notifications for routine investments that raise no competitive concerns. These filings consume government and investor resources while providing little antitrust benefit. Focusing on transactions that pose real competitive concerns will strengthen enforcement and reduce costs that are ultimately borne by fund investors, including pension plans, foundations, and endowments.
“Antitrust enforcement works best when regulators focus on transactions that present real competitive concerns,” said Jennifer Han, MFA Chief Legal Officer and Head of Global Regulatory Affairs. “The current framework imposes costly filing requirements on routine investments that do not threaten competition. Targeted reforms will improve enforcement efficiency, reduce burdens on institutional investors and market participants, and support stronger capital markets and economic growth.”
MFA’s four recommendations are to:
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Adopt a blanket 10% exemption: The current “investment-only” exemption is vague and creates uncertainty for minority investments that pose no competitive risk. A clear, bright-line rule requiring filings only when ownership exceeds 10% would provide certainty for investors and align with the government’s goal of focusing resources on transactions that present a genuine competitive threat. This threshold is appropriate because FTC and DOJ data show the agencies have never challenged investments at this level and have only opened initial reviews in extremely rare cases.
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Exempt convertible instrument conversions: Current rules can require fund managers to file twice for the same investment when convertible instruments later convert to equity. Eliminating the second filing would remove a duplicative burden that provides no antitrust benefit.
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Limit HSR filings to antitrust review: Using HSR filings to collect national security and foreign investment information exceeds the agencies’ statutory role and duplicates existing Committee on Foreign Investment in the United States (CFIUS) processes.
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Preserve real estate exemptions: Existing real estate carve-outs appropriately exclude transactions that pose no competitive risk. Including these transactions would add significant costs and complexity without improving enforcement.
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.
