USA Trends and Developments Contributed by: Scott Naidech, Basil Godellas, Alan Roth and Jacqueline Hu, Winston & Strawn
ed the scope of RIA’s responsibilities and duties to their clients, including private funds. On 12 June 2025, the SEC formally withdrew the proposed Safeguard - ing Rule. SEC proposed rule on outsourcing by investment advisers withdrawn On 26 October 2022, the SEC proposed Rule 206 (4)-11, a new rule under the Advisers Act that would prohibit RIAs from outsourcing certain services with - out meeting the requirements set forth in the rule. If adopted, the proposed rule would introduce four main requirements for RIAs: (i) due diligence and monitor - ing; (ii) books and records; (iii) oversight of service providers serving as record-keepers; and (iv) changes to Form ADV. On 12 June 2025, the SEC formally with - drew proposed Rule 206 (4)-11. Proposed rule to address conflicts of interest associated with the use of predictive data analytics by investment advisers withdrawn On 26 July 2023, the SEC proposed new rules under the Advisers Act to eliminate, or neutralise the effect of, certain conflicts of interest associated with invest - ment advisers’ interactions with investors using tech - nologies that optimise for, predict, guide, forecast, or direct investment-related behaviours or outcomes. The SEC also proposed similar amendments to rules under the Exchange Act for broker-dealers. On 12 June 2025, the SEC formally withdrew these proposed rules. Certain regulatory initiatives Continued focus on the Marketing Rule On 17 April 2024, the Division of Examinations (the “Division”) of the SEC released a Risk Alert, “Initial Observations Regarding Advisers Act Marketing Rule Compliance”, which provides observations related to investment advisers’ compliance with the Marketing Rule. The Division generally observed policies and proce - dures that were not “reasonably designed or imple - mented to address compliance with the Marketing Rule”, which resulted in gaps for preventing violations of the Marketing Rule.
Private funds and Defined Contribution Plans In 2025, private fund managers could be poised for significant opportunities as regulatory changes are expected to facilitate defined contribution (DC) retire - ment plans, such as 401 (k)s, allowing participants to invest in alternative assets. On 28 May 2025, the Department of Labor (DOL) rescinded its 2022 cau - tionary guidance on cryptocurrencies in retirement plans, which restored a neutral, facts-and-circum - stances approach to how a fiduciary evaluates wheth - er to include cryptocurrencies in a plan’s menu. On 7 August 2025, President Trump issued Executive Order, “Democratizing Access to Alternative Assets for 401 (k) Investors”, directing agencies to expand guidance that facilitates 401 (k) access to alternative assets. The Order defines alternative assets broadly to encompass private equity, real estate, digital assets, commodities, and infrastructure. The Order also instructs the DOL to re-examine ERISA fiduciary duties and propose rules or guidance with safe harbours within 180 days (by 3 February 2026) to curb litigation and clarify process - es for including alternative assets in asset allocation funds. The Order further instructs the SEC to consider ways to facilitate access to alternative assets in DC retirement plans, including consideration of revisions to SEC regulations and guidance relating to accredit - ed investor and qualified purchaser status. For private fund managers, these changes could unlock trillions in DC retirement plan assets. However, private funds that meet or exceed 25% benefit plan investor owner - ship and cannot rely on an exception, such as being a Venture Capital Operating Company or a Real Estate Operating Company, will presumably still require full ERISA compliance. Digital assets The regulatory landscape for digital assets in the Unit - ed States continues to evolve, as the United States has shifted its position to a more permissive and pro- innovation approach to the regulation of digital assets. The increased regulatory clarity will likely lead to addi - tional investment in digital assets by funds and other institutional investors. In July 2025, Congress passed the Guiding and Estab - lishing National Innovation for U.S. Stablecoins Act (the “GENIUS Act”), which establishes the first federal regulatory framework for payment stablecoins. Shortly
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