SEC Outlook | Brian Daly’s (SEC Director of IM) Remarks
SEC Releases
Introduction
On December 2, 2025, the newly appointed Director of the SEC’s Division of Investment Management, Brian Daly, addressed members of the American Bar Association (ABA) Private Funds Subcommittee and Investment Advisers / Investment Companies Subcommittee.
In the speech, Brian laid out his vision for the Division over the coming years: emphasizing outreach and dialogue, while pursuing a work-plan built around four themes: deregulation, regulatory modernization, democratization of alternative investments, and facilitating the thoughtful adoption of AI in the Investment Management industry.
We have provided key takeaways from Brian’s remarks below.
Key Takeaways from the SEC Remarks
- AI is going to Matter
- The Division sees AI as a transformative force in Investment Management, from enhancing disclosures to improving investor experience. But it also recognizes regulatory and compliance challenges (e.g., whether an AI agent’s outputs count as “marketing material” or “investment advice”).
- Democratization of Alternative Investments
- The SEC is open to incremental changes that make Private Funds and Alternative Investments more accessible to Non-Institutional (Retail) Investors, but intends to proceed thoughtfully, rather than impose a sweeping “big bang” overhaul.
- Regulators Intend to Listen
- Brian underscored the Division’s commitment to stakeholder engagement. The SEC wants to hear from industry participants, investors, and the public before committing to major new proposals.
- Push toward Deregulation where possible
- The SEC recognizes that America’s Capital Market strength is partly rooted in regulatory flexibility and indicated a willingness to remove or streamline Rules that no longer serve the public good.
- Modernization of Outdated Rules
- Some longstanding Rules, for example around Custody or Recordkeeping, reflect older, paper-based assumptions that no longer match a digital, multi-platform world. The SEC aims to rewrite or reinterpret rules in a “platform-independent, technology-neutral, future-ready” way.
- The SEC positions itself as the “Innovation Commission”
- The Commission appears receptive to industry-driven ideas that could inform future guidance and support responsible innovation.
How Vigilant Can Help
Given these stated objectives, here is how a Firm like Vigilant can add value:
1. Regulatory Change Monitoring & Advisory
- As the SEC embarks on modernization and deregulation, Firms need to stay ahead of shifting rules. Vigilant can track proposed changes, assess their impact on clients, and advise on how to reposition operations or compliance frameworks.
2. Compliance Readiness for AI Use Cases
- With the SEC signaling interest (but also uncertainty) around AI, Vigilant can help Firms determine which AI-based tools could be permissible, how to document disclosures, and whether certain AI agents need reporting.
3. Development of Procedures for new Products and On-Going Fund CCO Services
- As Private Funds and Alternative Investments become more accessible to Retail Clients, Vigilant can provide Fund Managers with the development of the Fund Compliance Manual and Code of Ethics and can serve as Fund CCO or Fund CCO Support while also providing Principal Underwriter/Statutory Distributor Services.
Vigilant’s Conclusion
The remarks by Brian Daly signal a shift in the tone and likely future direction of the SEC’s Division of Investment Management. The Division appears willing to embrace innovation, reduce regulatory burden where appropriate, and adapt to a rapidly changing financial-technology landscape.
For a firm like Vigilant, this is a moment to act proactively. By helping Clients anticipate, adapt to, and shape the coming wave of regulatory modernization and AI adoption, Vigilant can play a strategic role.
Schedule a call with Vigilant today to learn more about how we can help.