In remarks to the American Bar Association, the U.S. Securities & Exchange Commission’s Director of the Division of Investment Management, Brian Daly, set out the division’s forward priorities, framing its work around four themes: a deregulatory effort, modernization of the rulebook, “democratization” of alternative asset investments, and the promotion of artificial intelligence, with stakeholder listening positioned as a central operating focus. On deregulation, the division signalled openness to revisiting existing requirements that no longer serve their intended purpose, pointing to recent ETF initiatives including ETF share class orders intended to give industry an option to link exchange-traded funds and mutual fund structures. For modernization, Daly highlighted gaps in legacy requirements, including that the Custody Rule did not contemplate digital assets, and referenced a no-action letter issued regarding advisers’ ability to custody client crypto assets with state-chartered trusts, as well as plans to update recordkeeping expectations toward technology-neutral, platform-independent approaches. On retail access to private markets, the division described an incremental approach rather than a single “retailization” rule, noting coordination with the Department of Labor in connection with expanding alternative investments within 401(k) accounts and citing the SEC’s reconsideration of prior constraints on closed-end funds investing in private funds, followed by an Accounting and Disclosure Information bulletin for managers operating in a less constrained retail environment. On AI, Daly outlined a set of open regulatory questions around AI-enabled disclosure and “AI agents,” including whether outputs constitute marketing or advice, potential registration triggers, and how liability should be allocated. The division indicated that these priorities would be reflected in the next publication of its regulatory flexibility agenda and suggested that its approach will emphasise targeted actions coupled with ongoing staff engagement and observations.
U.S. Securities & Exchange Commission 2025-12-03
U.S. Securities & Exchange Commission outlines Investment Management Division priorities on deregulation, modernization, retail access to alternatives and artificial intelligence
The U.S. SEC's Director of the Division of Investment Management, Brian Daly, outlined priorities on deregulation, rulebook modernization, democratizing alternative asset investments, and AI promotion. Initiatives include revisiting ETF regulations, addressing digital asset custody gaps, expanding retail access to private markets, and exploring AI regulatory questions. These priorities will guide the division's regulatory flexibility agenda, emphasizing targeted actions and stakeholder engagement.