Who may be interested: Registered Investment Companies; Directors of Registered Investment Companies; Investment Advisers; Hedge Funds
Quick Take: At the December 2, 2025 meeting of the American Bar Association’s Federal Regulation of Securities Committee’s Private Funds Subcommittee and Investment Advisers and Investment Companies Subcommittee in Washington, D.C., SEC Division of Investment Management Director, Brian Daly, highlighted a preference for a pragmatic, incremental approach rather than sweeping rulemaking in connection with the Division’s four-year workplan.
The focus of Director Daly’s speech was incremental innovation in connection with the four-year framework the Division intends to follow. He emphasized that the Division staff is committed to listening to advisers, investors, and other industry participants in addressing evolving needs of the market. The Division’s agenda is expected to center on four themes: deregulation; modernization initiatives; democratization of alternative investments; and developments involving artificial intelligence.
Director Daly noted that measured deregulation can unlock value, demonstrating that the Division is open to rolling back or simplifying restrictions that no longer serve the evolving character of markets. He observed that the Division has taken a lighter-touch for sophisticated investors, an approach it intends to continue.
He observed that many rules, while originally well-intentioned, are now outdated and must be updated. He remarked that current regulations often do not reflect today’s digital, cloud-based, multi-platform environment. The Division intends to recommend changes that are platform-independent, technology-neutral, and future-ready.
Director Daly emphasized that democratization options for retail investors using post-tax, pre-retirement dollars would be a focus of the Division. He highlighted the retailization of private markets, noting that this approach will be thoughtful and incremental rather than a major overhaul of the private fund framework.
Finally, Director Daly described AI as a transformative force in the investment management industry that the Division can enable, support, and regulate thoughtfully, in alignment with the three pillars of the current Administration’s AI Action Plan. In this regard, he indicated that the Division is actively considering how AI can transform disclosure and investor experience, and how AI can enhance effective disclosure and potentially revolutionize investor engagement. He acknowledged that regulatory concerns must be addressed as AI adoption expands, including liability and registration issues with AI Agents.
For more detailed information on Director Daly’s remarks, the full transcript of Director Daly’s speech is available here.