The chaotic changes the SEC has undergone the past few months – including sudden reversals of policy, the abandonment of finalized regulations and decimation of professional staff at the agency – have had at least one significant positive result.
The relationship between the investment industry and the SEC, which deteriorated significantly during the tenure of former SEC chair Gary Gensler, has improved enough that members of the fund industry are once again willing to come in and talk to the director of the division most responsible for regulating their business.
“I’ve been saying since last March [2024] when I started this job that they should come talk to us,” Natasha Vij Greiner said during an appearance May 13 at the MFA Legal & Compliance 2025 conference in New York.
“My big joke is that no one came last March, but they’ve been coming since January,” Greiner said. “Registrants have been meeting with us more frequently since November, since January, and it is increasing over time,” she said.
The relationship between the investment industry and the SEC deteriorated significantly during Gensler’s tenure due to constant conflicts over the pace of new regulations being produced by the agency and the refusal by the SEC, according to its critics, to demonstrate the need for complex new regulations, modify proposals to minimize problems pointed out during comment periods or, often, to provide enough opportunity for members of the public to comment at all.
The agency’s aggressive approach to enforcement increased the level of tension to the point that fund-board advisers and former senior members of the SEC staff openly warned fund representatives not to approach the SEC with questions about regulation, compliance or potential enforcement actions for fear of making any potential penalties or judgements worse not better as the SEC promised.
Even SEC commissioner Hester Peirce slammed the agency for refusing to answer questions and refusing to engage with the industries it was responsible for policing.
The relationship gap grew so wide by late in the Gensler era that the SEC touted its 2024 decision to issue data-centric reports that included little analysis and few conclusions as a step toward open communication.
Greiner did, indeed, promise that the DIM would be more open to and interactive with the industry after she took over as head of the DIM in March, 2024.
She repeated that promise she repeated a year later while touting the list of FAQs and interpretive documents the DIM had issued to answer questions and complaints about the SEC marketing rule and other changes widely considered difficult to interpret but easy to violate.
“I’m still asking for engagement and I think this is a perfect time to come talk to us,” Greiner said during the MFA event May 13.
“There are a lot of rules, some of which were recently adopted, that have had compliance periods extended, and this is a time to talk to us pre-implementation,” she said.
“There are also rules on the books from a long time ago that just don’t work anymore. Having an awareness of why and how we might be able to address those issues is very important,” she said.
“Those are the conversations we bring to the chair or to internal discussions about what we should be focusing our efforts on,” she said.
Many of those conversations revolve around the difficulty funds and fund complexes have in implementing new rules that present major problems that were either not anticipated or not discussed during debates over major points of a big rule change.
“We always seem to have discussions about compliance periods and operational pain points after adoption, when you’re thinking about implementation,” she said. “Those are the things you don’t hear as much about until after the fact; having comment letters that address those types of issues would be really helpful.
“We don’t seem to talk about those during comment periods, so we need to set the tone and ask those questions and focus on them so we’ll do a better job on those as well,” Greiner said.
