On December 2, 2025, at a meeting of the American Bar Association’s Federal Regulation of Securities Committee’s Private Funds Subcommittee and Investment Advisers and Investment Companies Subcommittee, Brian Daly, Director of the SEC’s Division of Investment Management (the Division), delivered remarks in which he discussed the Division’s agenda, as well as its regulatory approach. Director Daly distilled the Division’s agenda into four themes: (1) an overall deregulatory effort; (2) modernization initiatives; (3) democratization of alternative asset investments; and (4) promotion of artificial intelligence.
Deregulation. Director Daly discussed how deregulation and regulatory restraint can “unlock value,” citing as examples the 2019 adoption of the ETF Rule (Rule 6c-11 under the Investment Company Act of 1940) and the subsequent growth of the exchange-traded fund marketplace, as well as the SEC’s recent ETF share class exemptive orders. He also highlighted the success of the SEC’s “lighter-touch” regulatory regime for private funds in promoting the development of new investment structures.
Modernization. Director Daly emphasized the importance of updating SEC rules in areas where the underlying policy goals remain valid but the rule requirements have become outdated. In particular, he highlighted rules related to custody of assets and recordkeeping—both areas that featured in the SEC’s Spring 2025 regulatory agenda—remarking on the introduction of digital assets and developments in communications technology since those rules were adopted.
Democratization. Director Daly also commented on the “democratization” of retail investment options, noting President Trump’s August 2025 Executive Order aimed at expanding access to alternative investments within ERISA retirement plans, including 401(k) plans. In this regard, Director Daly advised not to expect a comprehensive rulemaking to transform the regulation of private funds, for example, noting that the Division will instead seek to implement “targeted actions” to expand options for retail investors. He highlighted the Division’s August 2025 guidance on registered closed-end funds’ investments in private funds as one such example.
Artificial Intelligence. Finally, Director Daly discussed the importance of AI, noting the SEC’s desire to “enable, support and regulate [it] thoughtfully.” He highlighted that while AI has the potential to transform disclosure and the investor experience, it also raises new regulatory questions and concerns.
The transcript of Director Daly’s remarks is available here.
