Webinar | August 6, 2026
1:00 a.m. – 2:00 p.m. EDT
Register here.

The institutional private placement market has experienced continued and rapid growth in recent years, with new market participants playing a more significant role. In this session, we will discuss how investment grade debt private placements differ from bank debt as well as from public debt. In addition, we will discuss various related debt instruments. We will address the following:

  • Section 4(a)(2) institutional private placements and market developments
  • Typical marketing documents and investors; model forms and settlement issues
  • Covenants and other terms
  • Comparison to bank loans, Rule 144A offerings, and public debt offerings
  • Global depositary notes and role of depositary bank
  • Settlement issues and other recent developments

On July 9, 2026, the Financial Industry Regulatory Authority, Inc. (“FINRA”) published Regulatory Notice 26-14, requesting comment on a proposal to modernize certain requirements applicable to retail communications under FINRA Rule 2210 (Communications with the Public) (the “Proposal”).  The Proposal represents one of the most significant modernization efforts relating to the review and supervision of broker-dealer communications in over a decade, undertaken as part of FINRA’s broader “FINRA Forward” initiative.  The Proposal addresses three key areas:

(1) Modernizing supervision and review of retail communications by replacing the current prescriptive principal pre-use approval requirement with risk-based standards for supervising retail communications; 
(2) Modifying and streamlining retail communication filing requirements; and 
(3) Modifying and streamlining the broker-dealer standard for communications containing recommendations.

Continue reading this Legal Update.

On June 18, 2026, the Securities and Exchange Commission (“SEC”) and Commodity Futures Trading Commission (“CFTC”) issued a joint request for public comment regarding potential updates to the definitions of “swap” and “security-based swap,” along with other interpretive issues arising under Title VII of the Dodd-Frank Act.  The agencies seek feedback on whether existing definitions finalized in 2012 (referred to as the product definitions) and jurisdictional boundaries still appropriately reflect modern market structures, emerging financial products, and evolving trading practices.   The initiative is intended to provide greater regulatory certainty while reducing ambiguity in areas in which SEC and CFTC oversight overlaps.

While this request for comment (RFC) comes largely on the heels of discussions relating to event contracts, it is quite broad.  In relation to event contracts, the SEC and CFTC ask for comment as to whether additional clarity is required when an event “directly affects” the financial statements, financial condition or financial obligations of an issuer and is therefore a security-based swap that is subject to the SEC’s jurisdiction.  The agencies also ask whether there are instances in which an event contract referencing one or more securities should be considered a “put, call, straddle, option, or privilege” on securities instead of a swap or security-based swap.

The RFC asks a number of questions concerning other products that have been the subject of recent commentary and controversy, including cash-settled perpetual contracts, including perpetual futures.  For example, the release seeks comments as to whether a cash-settled perpetual contract referencing an equity security could be treated as a security future rather than a security-based swap.

Finally, and of interest to readers of this blog, the RFC asks whether clarity is needed to distinguish traditional debt securities that have always been excluded from the definition of swap and security-based swap, such as notes or bonds or debentures, the performance of which is based on a reference asset, so structured products.  The RFC asks for input on how to treat innovative or structured products that may blur the lines between swaps and security-based swaps, including whether factors such as issuance under a Trust Indenture Act‑qualified indenture or the existence of a lender‑borrower relationship should be dispositive of their characterization as debt securities.  This is concerning.

Read the official press release here.  Comments are due on or before August 24, 2026.

On July 8, 2026, the Securities and Exchange Commission (the “SEC”) announced that its Small Business Capital Formation Advisory Committee (the “SBCFA”) will hold a public meeting on July 21, 2026 to explore ways to modernize public market access and encourage IPOs and small public company capital formation.

As discussed in our prior post from April 2026, the SBCFA Committee held a meeting on April 28, 2026 focused on encouraging more companies to go and stay public.  Building on ideas generated during that meeting, members will continue exploring ways to encourage more companies to go and stay public.  At the April meeting, the Committee heard from members on the state of the IPO market, considering the existing regulatory framework and how IPO activity and market shifts are impacting decisions by companies, particularly small-cap companies, to go public.  SEC Chair Paul Atkins has championed a “Make IPOs Great Again” initiative, pledging to reduce regulatory friction and simplify listing requirements to reverse the long-term decline in the number of U.S. public companies.  Central to that effort is a focus on smaller companies, with the Chair arguing that disclosure requirements should be calibrated to a company’s size and maturity.

The upcoming meeting will advance those themes further.  The Committee will consider ways to modernize the IPO process and potential regulatory reforms, including certain recently proposed SEC rulemakings – which have been discussed in our May 2026 posts regarding reforms to the registered offering framework, enhancements to filer accommodations and simplified filer status for reporting companies, and optional semiannual reporting framework for public companies – aimed at reducing regulatory friction and facilitating capital formation. To facilitate discussion and deepen the Committee’s understanding of the regulatory landscape, members will hear from SEC staff in the Division of Corporation Finance and other market participants.

This discussion comes at a particularly significant moment, as the SEC’s 2026 Regulatory Agenda, recently released under Chair Atkins, noted that “[e]very IPO is an invitation to workers and savers to participate in the prosperity of the next generation of American enterprise” and that “[w]hen fewer companies go public, fewer investors receive that invitation.”  The SBCFA Committee meeting is open to the public and streamed live on SEC.gov. See the full agenda for the meeting, and visit the committee webpage.

The U.S. Court of Appeals for the Second Circuit recently provided guidance regarding Section 16(b) short-swing profit liability for corporate issuers and institutional investors.  On July 7, 2026, the court affirmed the dismissal of an action brought by the post-bankruptcy successor to Bed Bath & Beyond (“BBB”), which sought to recover more than $310 million in alleged short-swing profits from an institutional investor.

The Second Circuit held that contractual beneficial ownership blockers were effective and enforceable.  Those blockers limited the investor’s ability to convert securities or exercise warrants to the extent doing so would cause it to exceed a 9.99% beneficial ownership threshold. As a result, the investor never became a greater-than-10% beneficial owner for purposes of Section 16(b) of the Securities Exchange Act of 1934.  The court also rejected the plaintiff’s arguments that the blockers were ineffective because they could theoretically be amended by mutual agreement and that unsettled securities trades temporarily increased the investor’s beneficial ownership.  The decision provides guidance for issuers and investors that routinely rely on beneficial ownership blockers in structured equity transactions.

Background

In early 2023, BBB entered into an equity financing agreement in which the investor acquired convertible preferred stock and warrants.  The transaction documents included customary beneficial ownership blockers prohibiting the investor from converting preferred stock or exercising warrants to the extent doing so would cause it to beneficially own more than 9.99% of BBB’s outstanding common stock.  Following BBB’s Chapter 11 filing, its litigation successor alleged that the investor became a greater-than-10% beneficial owner by repeatedly converting securities, selling the resulting common stock, and converting additional securities. The plaintiff sought disgorgement of more than $310 million in alleged short-swing profits under Section 16(b).

The Second Circuit’s Decision

The Second Circuit concluded that the investor never became a greater-than-10% beneficial owner because the contractual beneficial ownership blocker prevented it from converting its securities or exercising its warrants in a manner that would cause its beneficial ownership to exceed the 9.99% cap.  The court also noted that trading records showed the investor’s beneficial ownership remained below the contractual threshold throughout the relevant period.  Accordingly, the investor was not subject to Section 16(b) liability on the theory that it was a greater-than-10% beneficial owner.  The plaintiff argued that the blockers should be disregarded because the governing agreements could theoretically be amended by mutual agreement. The Second Circuit rejected that argument, holding that the possibility of a future amendment did not negate an existing contractual restriction.  Because the investor could not unilaterally waive or disregard the blocker, the court concluded that the ownership limitation remained effective during the relevant period.

The plaintiff also argued that the investor temporarily exceeded the 10% threshold because shares it had agreed to sell remained unsettled while newly converted shares were added to its holdings.  The Second Circuit rejected that theory, explaining that beneficial ownership depends on an investor’s voting power or investment power over securities.

Takeaways

The Second Circuit’s decision confirms that:

  • properly drafted and complied-with beneficial ownership blockers may effectively prevent an investor from becoming a greater-than-10% beneficial owner for purposes of Section 16(b);
  • the possibility that contractual provisions could later be amended by mutual agreement does not, by itself, render those provisions ineffective; and
  • once an investor enters into a binding sale transaction, it generally no longer has investment power over those shares for purposes of determining beneficial ownership, even if settlement has not yet occurred.

The decision also provides helpful authority supporting the effectiveness of properly drafted beneficial ownership blockers commonly used in PIPE transactions, registered direct offerings, convertible preferred financings, warrant issuances, and other equity transactions.

On July 8, 2026, the staff (the “Staff”) of the Division of Corporation Finance (the “Division”) of the Securities and Exchange Commission (the “SEC”) issued a no-action letter (the “No-Action Letter”) in response to an incoming letter submitted on behalf of UBS Group AG (the “Incoming Letter”), addressing the application of the U.S. Securities Act of 1933 (as amended, the “Securities Act”) to the exchange or conversion of certain debt securities subject to the Swiss bail-in framework. 

The Incoming Letter sought the Staff’s confirmation that the Staff would not recommend the SEC take enforcement action in the event that the Swiss Financial Market Supervisory Authority (“FINMA”), the Swiss resolution authority, ordered a conversion of UBS Group AG’s (“UBS”) bail-in debt securities into new equity securities of UBS, pursuant to Swiss bail-in legislation. 

Bail-in securities are a type of financial instrument that qualifies as regulatory capital and are issued by bank holding companies or banks.  Depending on the specific resolution scheme applicable to such securities, should the bank issuing such securities fail or become likely to fail, the prudential regulator or banking agency with resolution authority (in this case FINMA) may exercise its bail-in powers (in combination with other resolution tools) to write down or convert, directly or indirectly, such bank’s bail-in securities, and if needed, other unsecured liabilities of the failed institution, into equity or other securities (such process, a “Bail-In”).  Bail-Ins are intended to allow a resolution authority to recapitalize a failing financial institution without relying on taxpayer funds.  UBS cited an earlier no-action letter from April 2026 in response to the Bank of England’s application relating to the exchange of certain debt securities under a UK-bail scenario, which we covered in a prior blog post.

Similar to the April 2026 no-action letter, the Division stated in the present No-Action Letter, that such an exchange of securities constitutes an “offer” and “sale” of securities within the meaning of Section 2(a)(3) of the Securities Act, but the Division will not take enforcement action in reliance on the opinion of applicant’s counsel that the Securities Act Section 3(a)(9) exemption is available.

Swiss Bail-In Framework

Pursuant to the bank resolution and restructuring regime of Switzerland, FINMA may only order a Bail-In if it determines that the financial institution, in this case UBS, has reached the point of “Insolvenzgefahr” (non-viability) pursuant to Article 25(1) of the Swiss Banking Act. Once FINMA determines an issuer has reached “non-viability,” FINMA would be authorized to order the full write-down or conversion of such issuer’s outstanding securities, including such issuer’s additional Tier 1 debt securities and Tier 2 debt securities in accordance with the contractual terms of these securities.  Following this write-down or conversion, the conversion Order would require the subsequent full reduction and/or cancellation of the issuer’s outstanding equity securities.  FINMA cannot order a Bail-In unless the resolution: (1) is based on a prudent valuation of the bank’s assets and liabilities along with a prudent estimate of the restructuring requirements, (2) is deemed not to be economically worse for creditors than the immediate initiation of insolvency proceedings, (3) takes into account the priority of creditors’ interests over those of the owners and the ranking of creditors appropriately and (4) adequately considers the legal and economic interconnection between assets, liabilities and contractual relationships.  In addition, the Swiss Banking Act addresses the sequence in which a write down or debt-to-equity conversion would occur in the event of Bail-in.

The request for relief set forth in the Incoming Letter was premised upon a direct conversion of the Bail-In securities into new equity securities of UBS Group AG as contemplated by the Swiss Banking Act, without the use of interim instruments.  This process is distinct from the bail-in mechanism addressed in the Bank of England’s No-Action Letter, whereby holders of the bail-in securities would be granted contingent beneficial interests known as “PROPPs” instead of being directly converted into news equity securities of the post-resolution entity.  However, similar to the PROPPs, there would be no additional consideration paid by holders of bail-in securities in connection with a Bail-In.

Section 3(a)(9) Exemption Applies

Section 3(a)(9) exempts from registration “any security exchanged by the issuer with its existing security holders exclusively where no commission or other remuneration is paid or given directly by or indirectly for soliciting such exchange.”  UBS was of the opinion that the conditions for reliance on Section 3(a)(9) would be met in connection with the above-described Swiss Bail-In resolution mechanism.  The Staff concluded that it would not recommend enforcement action if UBS, upon reaching non-viability and in reliance on an opinion of counsel that the exemption provided in Section 3(a)(9) is available, was directed by FINMA to convert its bail-in securities directly into new equity securities of UBS. The Staff also noted that UBS would remain the issuer of the new equity securities issued upon such Bail-In conversion.  This new no-action letter provides greater clarity on the SEC’s position relating to the applicability of the Section 3(a)(9) exemption in the case of a bail-in of a Swiss financial institution, especially since the failure of Credit Suisse (a Swiss financial institution) had precipitated questions on the applicability of Section 3(a)(9).

On July 9, 2026, the Securities and Exchange Commission’s Division of Corporation Finance issued a number of new Corporation Finance Interpretations (“CFIs”) (marking more than 150 new and revised CFIs since January 2025!).  The new CFIs focus on Exchange Act Sections 13(d) and 13(g), including guidance related to total return swaps on equity securities, while additional new CFIs focus on the proxy rules, Regulation Crowdfunding (“Reg CF”) and the tender offer rules.  The new CFIs regarding tender offers, in particular, reflect a modernization of the Division’s guidance in response to technological changes, a pattern we have seen from this Commission recently.  A summary of the new CFIs follows:

TopicGuidance
Exchange Act Sections 13(d) and 13(g) Question 105.08A person who enters into a standard total return equity swap that (i) settles exclusively in cash and (ii) only refers to a class of equity securities in order to identify a reference security, but does not confer  voting or investment power, or the right to acquire, such security (a “TRS”), is not deemed to acquire beneficial ownership (for purposes of Section 13(d) and Rule 13d-3) of the reference security, including any equity securities the counterparty may hold for hedging purposes, solely as a result of entering into the TRS.
Exchange Act Sections 13(d) and 13(g) Question 105.09A person who enters into a TRS would be “deemed” a beneficial owner of the reference securities, including any equity securities held by a counterparty to hedge its risk, if the TRS is directly or indirectly used in an “arrangement” to prevent the vesting of beneficial ownership by the TRS purchaser as part of a plan or scheme to evade reporting obligations.  Entry into a TRS for economic exposure to the reference security, without more, does not create such a scheme.
Exchange Act Sections 13(d) and 13(g) Question 105.10With regard to a TRS, “plan or scheme” to evade, as used in Rule 13d-3(b), is generally the intent to enter into a TRS that creates a false appearance contrary to the actual facts.  In other words, did the person know or was s/he reckless in not knowing that use of the TRS would create a false appearance that his or her interest is only economic?
Exchange Act Sections 13(d) and 13(g) Question 110.09An entity is formed specifically to raise funds to acquire securities of an issuer and engage in a related activism campaign.  Prospective investors in the entity are informed in advance of the specific purpose of the funds, including the identity of the issuer.  If the entity is required to report beneficial ownership of the issuer’s securities on a Schedule 13D, the identities of all of the investors in the entity must be disclosed in the Schedule 13D (see Item 3 of Schedule 13D regarding the source of funds used in purchasing the issuer’s securities).
Exchange Act Sections 13(d) and 13(g) Question 110.10When a Schedule 13D reporting person is a general or limited partnership and not a natural person, Instruction C to Schedule 13D requires listing persons and entities in addition to the reporting person when providing the information required by Items 2-6 of Schedule 13D (for example, general partners).
Proxy Rules and Schedules 14A/14C Question 155.02An entity is formed specifically to raise funds to acquire securities of a registrant and engage in a proxy solicitation to change the composition of the registrant’s board of directors.  Prospective investors in the entity are informed in advance of the specific purpose for the funds, the identity of the registrant and the reason for the proxy solicitation.  Each investor that invests more than $500 in the entity is a “participant” in the solicitation (see Instruction 3(a)(iv) to Item 4 of Schedule 14A).
Regulation Crowdfunding Question 202.02An issuer sold securities in a Reg CF offering, so has an ongoing reporting obligation under Rule 202(a) of Reg CF.  All of the over 300 investors in the offering invested through a crowdfunding vehicle compliant with Rule 3a-9 under the Investment Company Act of 1940.  However, the issuer cannot avail itself of Rule 202(b)(2) after it has filed one annual report, because, for purposes of Rule 202(b), “record holders” means investors in the offering, even if they invested through a single crowdfunding vehicle.  The reporting obligation continues until there are less than 300 investors, or the issuer is otherwise able to stop reporting.
Tender Offers Rules and Schedules Question 104.03In connection with a tender offer solely for cash and/or securities exempt from registration under Section 3 of the Securities Act,  an issuer can satisfy the disclosure requirement in Rule 13e-4(d)(3) via a press release that is issued as soon as practicable on the date of commencement of the offer through a widely disseminated news or wire service and contains (i) the disclosure required by Rule 13e-4(d)(3) and (ii) an active hyperlink to the tender offer materials and any related documents, provided that (a) the tender offer is not subject to Rule 13e-3 and (b) the issuer promptly furnishes the materials to any security holder who so requests.
Tender Offers Rules and Schedules Question 131.04A bidder in a tender offer may satisfy the disclosure requirement in Rule 14d-6 via a press release issued as soon as practicable on the date of commencement of the offer through a widely disseminated news or wire service that contains (i) the disclosure required by Rule 14(d)-6(d)(2) and (ii) an active hyperlink to the tender offer materials and any related documents, provided that (a) the tender offer is not subject to Rule 13e-3 and (b) the bidder reasonably promptly furnishes the materials to any security holder who so requests.

Find all the new CFIs here.

On June 23, 2026, the Securities and Exchange Commission’s (“SEC”) Division of Corporation Finance (the “Division”) issued a new Corporation Finance Interpretation (“CFI”), providing guidance on the disclosure requirements when a company seeks to list rights on a national securities exchange in connection with a business combination transaction.

  New Question 142.01 under Section 142 pertaining to Section 8 of the Securities Act of 1933 (as amended, the “Securities Act”) addresses a scenario in which a company, in connection with a business combination, seeks to list rights on a national securities exchange without the underlying securities also being listed.  National securities exchanges require that a company have an effective registration statement prior to the rights being listed and that such registration statement register the issuance of the underlying securities upon exercise of the rights.

In this scenario, the Division confirmed that such company’s registration statement must contain information regarding the contemplated business combination transaction and the business to be acquired.  Now that the Division requires that details of the contemplated acquisition be disclosed, companies considering this approach would need to take into account that their registration statement contain disclosure about the target business and transaction terms.  Prior to this guidance, some companies might have taken the view that detailed disclosure may have been deferred until the rights were exercised.  See the full CFI here.

This week, the Securities and Exchange Commission’s 2026 rulemaking agenda (the “Unified Agenda”) was made publicly available (see here).  The Unified Agenda sets out the SEC’s rulemaking priorities for the next year, with general timeframes (but these timeframes are guidelines, and should not be considered definite indicators of when rulemakings will happen).  The current Unified Agenda includes an ambitious 36 projects at the proposed rule stage, plus two pre-rule items.

Chairman Atkins released a statement on July 7, 2026 (see here) discussing the Unified Agenda and the goal that all of the actions on the agenda be rooted in the SEC’s core mission of protecting investors, facilitating capital formation, and maintaining fair, orderly, and efficient markets.  He highlighted in particular the presence on the agenda of rulemakings that advance the “regulatory framework to reflect the realities of today’s operating environment – embracing innovation and new technology,” in particular with respect to crypto assets and tokenized securities.  Chairman Atkins’ statement also stressed his goal of revitalizing the public markets and encouraging IPOs, noting that the Unified Agenda includes a number of proposals that would transform the disclosure regime for public companies, but also noted the importance of the private markets, calling attention to the items on the agenda that would facilitate retail investor participation in private markets.

Several projects on the Unified Agenda are carryovers from the Spring 2025 agenda, which was published in September 2025.  These include:

  • Crypto:  The Agenda includes two crypto-related items, “Crypto Assets” and “Crypto Market Structure Amendments,” both in the proposed rule stage, and both with a target date that indicates these are a high priority for the SEC (most of the proposed rules on the Unified Agenda have an October 2026 target date, while these have a July 2026 target).  This prioritization of crypto-related rulemaking is not surprising given the Administration’s and the SEC’s focus on crypto issues; in his statement, Chairman Atkins referenced “President Trump’s goal to ensure that the United States is the crypto capital of the world” and highlighted these initiatives.
  • Foreign Private Issuers.  Previously included on the agenda in the “pre-rule stage,” in June 2025, the SEC issued a concept release requesting comment on the test for foreign private issuer eligibility.  The Unified Agenda indicates that rule amendments to “enhance the regulatory framework governing foreign private issuers” is still a priority for the Commission.
  • Updating Exempt Offering Pathways.  This is another initiative previously reported on the Spring 2025 agenda, although the scope of this rulemaking is not entirely clear at this time. While it may include proposed improvements to the commonly used exemptions from Securities Act registration — Regulation D, Regulation A, and/or Regulation Crowdfunding – the description of this initiative on the Unified Agenda (in a change from the Spring 2025 description) also indicates that it may encompass “potential amendments to the definition of accredited investor.”  Staff in the Division of Corporation Finance have previously made public statements about looking into the possibility of developing an accredited investor examination; it may be that we will see a proposal for such an exam in connection with this agenda item.
  • Rule 144 Safe Harbor.  Consistent with the prior version of the agenda, the Unified Agenda includes a potential re-proposal of amendments to Rule 144, to increase instances in which the safe harbor would be available. The SEC proposed changes to Rule 144 in 2021 that would have revised the holding period for securities that are acquired upon the conversion or exchange of certain market-adjustable securities of an unlisted issuer, among other changes.
  • Rationalization of Disclosure Practices. The Unified Agenda continues to include potential rule amendments to “rationalize disclosure practices to facilitate material disclosure by companies and shareholders’ access to that information.”  As Chairman Atkins has repeatedly stressed, it is priority of the current SEC to re-examine its disclosure requirements with a focus on materiality; this initiative may include revisions to Regulation S-K, following on the SEC’s request for input from the public on how the Commission can amend Regulation S-K.
  • Shareholder Proposal Modernization. Consistent with the prior agenda, the Unified Agenda states that Division of Corporation Finance is considering recommending rule amendments to modernize Rule 14a-8 to reduce compliance burdens for registrants and account for developments since the rule was last amended. Following on a turbulent proxy season in which the SEC staff did not take on its customary role in the Rule 14a-8 no-action process (see our analysis of the proxy season here), there is significant interest from issuers and proponents in the contours of any proposal put forward by the Commission in connection with this agenda item.

New to the Unified Agenda are several rulemaking initiatives that are already underway, or that have been discussed by Chairman Atkins and others over the last several months as areas of interest.  These include:

  • Executive Compensation Disclosure Reform.  Following on the SEC’s June 2025 roundtable and request for public input on possible reforms to the executive compensation disclosure requirements, the Unified Agenda states that the Division of Corporation Finance is considering recommending amendments to Item 402 of Regulation S-K to rationalize the executive compensation disclosure requirements.
  • Financial Institution Resolution Transactions. The agenda includes an initiative to consider rule amendments to “provide clarity with respect to transactions undertaken in connection with financial institution resolution processes.”  We posted on this previously, see here.
  • Amendments to Certain Proxy Rules. The Division of Corporation Finance is also considering whether to recommend that the Commission “modernize certain rules regarding the proxy solicitation process, including certain filing and procedural requirements relating to proxy solicitations and shareholder meetings, to reduce costs and compliance burdens.”
  • Electronic Delivery of Information Under the Federal Securities Laws. This potential rulemaking initiative would address the use of electronic delivery for information required to be delivered under the SEC’s rules, “in order to modernize the Commission’s approach to the use of electronic media and reduce costs associated with paper delivery.”
  • Enhancing Retail Exposure to Private Markets. The Unified Agenda states that the Division of Investment Management is considering whether to recommend proposed amendments under the Investment Advisers Act of 1940 and the Investment Company Act of 1940 “to better facilitate retail investor exposure to private markets through registered investment companies and to allow investment advisers to charge performance fees to an expanded set of clients.”
  • Regulatory Status of Finders. Potentially addressing a long-standing area of regulatory uncertainty, the Unified Agenda notes that the Division of Trading and Markets is considering proposed rules concerning the regulatory status of “finders” for purposes of Section 15(a) of the Exchange Act. The SEC previously proposed to address the finders issue through a proposed exemptive order in 2020, but did not move forward to finalize the approach.

Other proposals listed on the Unified Agenda that have already been published include Semiannual Reporting, Registered Offering Reform, Simplification of Filer Status, and Rescission of Climate-Related Disclosure Rules. (See our discussions of these rulemaking proposals here, here, here, and here.)

This is an ambitious set of rulemaking projects that, if adopted, has the potential to drastically change the regulatory landscape. The process of notice-and-comment rulemaking takes considerable time, so while market participants should not expect changes immediately — or all at once — there are certainly some notable changes on the horizon for issuers, investors and practitioners.

On June 18, 2026, the Securities and Exchange Commission (“SEC”) granted conditional exemptive relief (the “Conditional Exemption”) from the central clearing mandate for U.S. Treasury securities for private funds to access central clearing through captive clearing subsidiaries.

SEC Rules 17ad-22(a) and (e)(18)(iv)(A) require a U.S. Treasury securities covered clearing agency (“U.S. Treasury securities CCA”) to maintain written policies and procedures reasonably designed to (i) require direct participants to centrally clear all “eligible secondary market transactions” to which they are a counterparty and (ii) identify and monitor those participants’ submission of transactions for clearing (the “Trade Submission Requirement”).  The definition of “eligible secondary market transactions” excludes any repurchase or reverse repurchase agreement (“repo”) collateralized by U.S. Treasury securities entered into between a direct participant and an affiliated counterparty (the “Inter-Affiliate Exclusion”).  Among other conditions, the Inter-Affiliate Exclusion requires the affiliated counterparty to be a bank, broker-dealer or futures commission merchant, rendering it unavailable to private funds.

Under the Conditional Exemption, a repo between a private fund and its captive clearing subsidiary – a direct participant of a U.S. Treasury securities CCA – falls outside the definition of an “eligible secondary market transaction,” subject to three conditions:

  1. The captive clearing subsidiary must be directly or indirectly wholly-owned by one or more private funds;
  2. If the captive clearing subsidiary is owned by more than one private fund, those funds must be managed by a common investment adviser or an affiliated group of investment advisers; and
  3. The private fund(s) and the captive clearing subsidiary must satisfy the other applicable conditions of the Inter-Affiliate Exclusion, including that the affiliated counterparty must centrally clear all other repos collateralized by U.S. Treasury securities to which it is a party.

For this purpose, a “private fund” is an issuer that would be an investment company, as defined in the Investment Company Act of 1940, but for Section 3(c)(1) or 3(c)(7) of that Act.  In practice, the Conditional Exemption enables certain private funds to comply with the central clearing mandate on a more cost-effective basis.  Read the SEC’s Exemptive Order.