U.S. securities and derivatives regulators are once again pushing back the compliance deadline for tougher reporting requirements for private funds — highlighting a shift in regulatory policy.
The U.S. Securities and Exchange Commission (SEC) and U.S. Commodity Futures Trading Commission (CFTC) voted to further extend the deadline for investment advisers to comply with changes to regulatory reporting requirements for certain private funds, such as hedge funds and private equity funds, which were initially adopted in early 2024.
Among other things, those changes would increase the data that must be reported on hedge funds’ investment and counterparty exposures, and expand reporting obligations to certain, new private fund strategies.
The new requirements were first supposed to take effect in March, then delayed to June, and again to October this year — ostensibly to give the industry more time to adapt to the changes.
On Wednesday, the regulators pushed the compliance deadline back another year to Oct. 1, 2026, citing an executive order that was signed earlier this year calling on regulators to delay and reconsider rule making initiatives that hadn’t taken effect yet.
New SEC chair, Paul Atkins, who supported the latest delay, said that he has directed staff in the SEC’s investment management division to consider potential changes to the rules — such as, “whether we can reduce the number of advisers required to file the form without meaningfully reducing the key risk and exposure information needed by the commissions…”
However, the move was criticized by SEC commissioner Caroline Crenshaw, who opposed the extension. Among other things, she said that the repeated delays circumvent the transparent rule making process, and ignores judicial precedent.
“This is a thinly veiled sleight of hand to dismantle the work of a prior commission while weaseling out of the clear requirements of well-established law,” she said.
“There is a reason courts have forbidden this type of behavior. This approach erodes duly adopted commission rulemakings. It erodes the rule of law. Continuity and certainty are beneficial to registrants, investors, and the stability of the markets at large,” she added.
Crenshaw, the regulator’s sole Democratic commissioner, argued that if policymakers want to revise the requirements, they should first be allowed to take effect, and then a transparent process to amend the rules should be followed.
“Instead, we are creating a new normal where the [administrative law] is optional and final rules are only final when we feel like it,” she said. “Today’s vote signals that we are willing to repeatedly bend — or, in this case, extend — the rules until they break.”