Published on Jul 8th, 2022 |

Brief Introduction and Reminder

On Wednesday, June 15th, the SEC announced that they would open any requests for comments on Certain Information Providers Acting as Investment Advisers.

This allows the information provider industry and other interested parties a chance to provide feedback and express their viewpoints for any changes/adjustments.

Reminder: The deadline to submit comments is on Tuesday, August 16th, or 30 days after the Federal Register has published the Request.

What are the Three Categories Requested for Comments on?

  1. Model Portfolio Providers;
  2. Index Providers; and
  3. Pricing Services.

For many years, information providers have not been subject to regulation under the Advisers Act due to the nature of their services and products. After seeing this request by the SEC, they may be reconsidering information provider status under the Advisers Act.

Areas of Adviser Regulation Due for a Potential Increase

  • Barriers appointed to entry to new potential information providers, or to cause existing information providers to close altogether or combine with other providers;
  • Relating to oversight of model providers, index providers, or pricing services, there could be additional enforced burdens for product sponsors and registered fund boards that become subject to SEC regulation;
  • Reduction in the complexity and future innovation for investment strategies that are available to retail investors;
  • If an existing or replacement provider rebuttals, or has the inability to satisfy the regulatory requirements, then this could result in the closure of some investment products or funds; and
  • If costs cannot be shifted to investors, then there would be a reduction in investment product and advisory service offerings to investors.

Vigilant’s Final Conclusion

There is a common belief throughout the Industry that there will be a compelling amount of responses stemming from this comment Request by the SEC.

Be sure to stay tuned for updates from the SEC as they gather the comments from the providers.

Contact Us

Miss Out on Vigilant’s Monthly Newsletter?

View the June Newsletter Here