Gary Gensler, outgoing chair of the US Securities and Exchange Commission, chose to make one of his final acts an appeal of the recent court ruling to vacate the Dealer Rule on the grounds that it exceeds the regulator’s statutory authority. This essentially means that the acting chair or Paul Atkins (depending on timing) can take the appeal forward or dismiss it.
Jack Inglis, CEO of the Alternative Investment Management Association (AIMA), said in a statement: “Hedge funds managed by AIMA’s members are not dealers. They do not have customers – a requirement for determining whether a market participant is indeed a dealer. The District Court affirmed this view when we challenged the rule last year. It found that the SEC exceeded its statutory authority by adopting the Dealer Rule and vacated it in its entirety. We are disappointed in the SEC’s eleventh-hour decision to appeal; however, we are confident in our arguments and look forward to working with the new SEC leadership to reconsider this decision.”