Silver’s CEO, Fizza Khan, recently spoke with Chad Bray, a reporter at FundFire, about the Fifth Circuit Court of Appeals’ recent challenge of the SEC’s handling of two new transparency rules for securities lending and short sales.
This lawsuit, filed by the Managed Funds Association and the Alternative Investment Management Association, underscores a new industry tactic—challenging SEC rulemaking in the conservative-leaning Fifth Circuit rather than the D.C. Circuit, which historically handles administrative cases. Judge Cory Wilson highlighted the apparent inconsistency, suggesting the SEC’s approach might be “having its cake and eating it too.”
Commenting on this recent trend, Fizza notes that “[i]t will not be surprising if there is more backlash against the SEC’s rulemaking.” She goes on to say that, “in addition to the Fifth Circuit’s decision in the private funds case, the SEC and other regulators lost ground under a U.S. Supreme Court decision in June to overturn a 1984 ruling that spawned the so-called Chevron doctrine, in which judges deferred to a federal agency’s interpretation of a statute if Congress had not directly addressed the issue at hand.”
She concludes by stating, “I think this opens the door for more challenges and now we’re seeing it. These are cases we cannot take lightly. It’s something that is affording the private fund community a voice that I don’t think it had for quite some time.”
To read the full article please visit the FundFire website here.
