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SEC Rulemaking in 2026: Three Regulatory Developments Every Investment Adviser and Private Fund Manager Should Watch
1. Modernizing Investor Communications Through Electronic Delivery
One of the SEC’s most practical proposals seeks to modernize how regulated entities deliver required disclosures to investors. For decades, many provisions under the federal securities laws, including the Investment Advisers Act of 1940, as amended (the “Advisers Act”), have required firms to obtain affirmative consent – typically through contractual arrangements, before delivering certain required documents electronically. As investor communications have increasingly shifted to digital platforms, these requirements have become more burdensome without necessarily improving investor protection.[1]
The SEC has proposed establishing electronic delivery as the default method for delivering many required documents, while preserving an investor’s right to request paper delivery at any time. If adopted, the proposal would generally permit regulated entities to satisfy delivery obligations by transmitting documents electronically or providing notice that documents are available through an electronic platform, provided investors receive timely access and appropriate safeguards remain in place.
a. Why the Proposal Matters
For broker dealers, investment advisers, registered investment companies, and other financial institutions, a modernized delivery framework could produce meaningful operational efficiencies. Potential benefits include: reduced printing and mailing expenses; faster delivery of required disclosures; improved document retention and audit trails; more efficient supervisory procedures; and a more consistent experience for clients who already conduct most financial business electronically.
Although the proposal appears intended to reduce compliance costs, firms should not assume implementation will be automatic. Organizations should evaluate whether their existing policies adequately address electronic communications, cybersecurity controls, client notification procedures, record retention obligations, and supervisory review processes. The proposal remains subject to the SEC’s rulemaking process, and its final requirements may differ from the current proposal. Nevertheless, firms may wish to begin reviewing internal procedures now so they are positioned to respond efficiently if a final rule is adopted.
2. Proposed Form PF Amendments Continue the SEC’s Focus on Private Funds
The SEC has also proposed additional amendments to Form PF, continuing a multi-year effort to refine the confidential reporting obligations applicable to many SEC-registered private fund advisers.[2] Form PF serves as an important regulatory reporting tool used by the SEC and the Financial Stability Oversight Council to monitor potential risks within the private fund industry. Since its adoption, the form has been revised several times as regulators have sought more timely and standardized information regarding fund operations and market activity. The latest proposal would expand certain reporting requirements for Form PF filers by requesting additional information regarding matters such as:
- fund operations;
- leverage and financing arrangements;
- portfolio exposures;
- liquidity management;
- investor concentration; and
- other operational metrics designed to improve regulatory visibility into private fund activities.
Although the proposal does not fundamentally change the purpose of Form PF, it would require many advisers to collect and organize more detailed information than they currently report.
a. Practical Considerations for Private Fund Advisers
Firms engaged in investment management, fund formation, private investment funds, hedge funds, private equity funds, and other alternative investment strategies should carefully evaluate whether their current compliance and reporting systems capture the information contemplated by the proposal. In many organizations, Form PF preparation involves coordination among legal, compliance, operations, finance, and portfolio management personnel. Additional reporting requirements may therefore require enhancements to internal data collection procedures well before any compliance date arrives. Because the proposal remains open to public comment before final adoption, advisers should continue monitoring developments and consider whether submitting comments would be appropriate where operational concerns exist.
3. The Spring 2026 Regulatory Flexibility Agenda Signals the SEC’s Broader Priorities
Twice each year, the SEC publishes its Regulatory Flexibility Agenda, which identifies the rulemaking initiatives the Commission expects to consider during the upcoming regulatory cycle. Although the Agenda is not binding, it provides one of the clearest indicators of the Commission’s policy priorities and anticipated rulemaking activity.[3] Beyond electronic delivery and Form PF, the Spring 2026 Regulatory Flexibility Agenda identifies several initiatives that could substantially affect investment advisers, broker dealers, private funds, financial institutions, and participants throughout the capital markets.
a. Clarifying the Regulatory Status of Finders
One of the most anticipated items is a proposed rule addressing the regulatory status of finders under Section 15(a) of the Securities Exchange Act of 1934. For decades, market participants have operated without comprehensive regulatory guidance distinguishing permissible finder activities from conduct requiring registration as a broker-dealer. Businesses raising capital, private equity firms, venture capital sponsors, and participants in private placements have frequently relied upon SEC staff guidance, no-action letters, and judicial interpretations rather than formal Commission rules.
The inclusion of this proposal in the Agenda signals that the SEC is considering establishing a more predictable regulatory framework governing limited capital introduction activities. Although no proposed rule text has yet been released, additional clarity could reduce regulatory uncertainty surrounding referral arrangements and transaction-based compensation while assisting firms in evaluating whether particular activities require broker-dealer registration.[4]
b. Proposed Custody Rule Amendments
The Agenda also includes proposed amendments to the custody framework under both the Advisers Act and the Investment Company Act of 1940. Rather than continuing the Commission’s previously proposed Safeguarding Rule, which generated significant industry feedback and was ultimately withdrawn, the current Agenda indicates that the SEC intends to develop more targeted amendments designed to modernize the existing custody regime while addressing identified compliance burdens.[5]
Although the Commission has not yet published draft amendments, advisers should anticipate that the proposal may address evolving custody practices involving digital assets, privately offered securities, and other non-traditional asset classes. Changes could affect custodial arrangements, compliance testing, examination priorities, and operational controls for investment advisers, asset managers, registered investment companies, and other firms responsible for safeguarding client assets.
c. Enhancing Retail Exposure to Private Markets
Another notable initiative is the proposal entitled “Enhancing Retail Exposure to Private Markets.” Historically, participation in private funds and other private market investments has largely been limited to institutional investors and individuals meeting the accredited investor or qualified purchaser standards. The Commission is now evaluating whether broader retail participation can be facilitated through appropriately regulated investment vehicles while maintaining meaningful investor protections.[6]
According to the Agenda and accompanying public statements by SEC leadership, the Commission is considering amendments under both the Advisers Act and the Investment Company Act that could facilitate greater retail access to private market investments through registered investment products. The Commission is also evaluating whether to expand the categories of clients to whom investment advisers may charge performance-based compensation.[7]
If adopted, these initiatives could materially expand investor access to private equity funds, private investment funds, and other alternative investments, while creating new opportunities for investment management firms to develop innovative investment products. At the same time, advisers should expect continued emphasis on disclosure, valuation, liquidity management, and fiduciary obligations designed to protect retail investors participating in less liquid asset classes.
4. A Common Regulatory Theme
Viewed collectively, the Spring 2026 Regulatory Flexibility Agenda reflects a Commission focused on modernizing existing regulations, clarifying longstanding areas of uncertainty, facilitating capital formation, and reducing unnecessary compliance burdens where appropriate. Rather than simply increasing regulation, the Agenda suggests a more targeted approach that seeks to align existing regulatory frameworks with today’s financial markets while preserving core investor protection principles.
a. Preparing for What Comes Next
Although these initiatives remain in various stages of the rulemaking process, firms should not wait until final rules are adopted before evaluating their potential impact. For investment advisers, broker dealers, asset managers, financial professionals, and private equity firms, proactive preparation can reduce implementation costs and minimize compliance disruptions if the SEC moves forward with these proposals. Organizations should consider:
- reviewing electronic communication policies and delivery procedures;
- evaluating cybersecurity and record retention controls supporting electronic communications;
- assessing whether existing Form PF reporting processes capture the information contemplated by the proposed amendments;
- monitoring future SEC releases and public comment periods; and
- consulting experienced securities counsel regarding the potential impact on existing compliance programs.
The SEC’s recent initiatives demonstrate that regulatory modernization is not synonymous with deregulation. Rather, the Commission appears focused on reducing administrative burdens where technology permits while expanding regulatory visibility into areas it views as presenting greater systemic or investor protection concerns. For firms operating under the Advisers Act, remaining informed about these developments will be critical as the SEC continues implementing its 2026 regulatory agenda.
Shustak Reynolds & Partners, P.C. focuses its practice on securities and financial services law and complex business disputes.
We represent many investment advisors, financial professionals, broker-dealers, registered representatives, investors and businesses.
Attorney Robert R. Boeche, II can be reached in the firm’s San Diego office at (619) 696-9500.
[1] Securities and Exchange Commission, Electronic Delivery of Certain Required Disclosures Under the Federal Securities Laws, Release No. 33-11468 (June 4, 2025), available at https://www.sec.gov
[2] Securities and Exchange Commission, Form PF; Reporting Requirements for All Filers, Proposed Rule Release (2026), available through the SEC Rulemaking Activity webpage, https://www.sec.gov/rules-regulations/rulemaking-activit
[3] Securities and Exchange Commission, Spring 2026 Regulatory Flexibility Agenda and SEC Rulemaking Activity, available at https://www.sec.gov/rules-regulations/rulemaking-activity; Office of Information and Regulatory Affairs, Unified Agenda of Federal Regulatory and Deregulatory Actions, available at https://www.reginfo.gov
[4] Id.
[5] Id.
[6] Paul S. Atkins, Chairman, Securities and Exchange Commission, Statement on the Spring 2026 Regulatory Agenda (July 7, 2026), available at https://www.sec.gov/newsroom/speeches-statements/atkins-statement-2026-regulatory-agenda-070726
[7] Id.