HomeNews & BlogMFA submits amicus brief against SEC in case over CAT funding model

MFA submits amicus brief against SEC in case over CAT funding model

Washington, DC – Today, MFA and other trade associations submitted an amicus curiae brief in the United States Court of Appeals for the Eleventh Circuit in the American Securities Association, Petitioners v. SEC case. The case addresses the SEC approval of the Consolidated Audit Trail (CAT) funding model.

The brief highlights that the funding model passes costs through to dealers and investors who lack any input over the program’s budget or governance. This funding model will continue to encourage mismanagement of CAT and raise costs for investors. In approving the funding model, the SEC did not adequately address these concerns, nor did it sufficiently consider alternative funding models. MFA’s amicus supports the petitioners challenge of the unlawful funding model and urges the court to invalidate the SEC’s approval order on the grounds that it is arbitrary and capricious.

MFA President and CEO Bryan Corbett issued the following statement regarding the amicus brief:

“Costs of the CAT are hundreds of millions of dollars higher than anticipated. The SEC’s approval of a blank check funding model will continue to encourage mismanagement of the program by passing the enormous and unchecked costs onto broker-dealers who lack a vote on the CAT’s operating committee. The SEC failed to consider alternative funding models and did not adequately address the serious issues raised by stakeholders. Unless this rule is vacated, costs will continue to rise for investors, harming US capital markets. MFA is joining with other industry groups in calling on the court to vacate the SEC’s arbitrary and capricious approval of an unlawful funding model.”MFA President and CEO Bryan Corbett

Read the amicus brief here.


About the global alternative asset management industry

The global alternative asset management industry, including hedge funds, credit funds, and crossover funds, has assets under management of $5.5 trillion (Q3 2023). The industry serves thousands of public and private pension funds, charitable endowments, foundations, sovereign governments, and other global institutional investors by providing portfolio diversification and risk-adjusted returns to help meet their funding obligations and return targets.

About MFA

Managed Funds Association (MFA), based in Washington, DC, New York, 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, 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 175 member fund managers, including traditional hedge funds, credit funds, and crossover funds, that collectively manage over $3.2 trillion across a diverse group of investment strategies. Member firms help pension plans, university endowments, charitable foundations, and other institutional investors to diversify their investments, manage risk, and generate attractive returns over time.

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