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FOIA Changes and Fund Advisers

In a recent article, Stradley Ronon's John Baker examined the effect that an amendment to the Dodd-Frank Act moving through Congress may have on information collected by the SEC in the course of their examinations and investigations from investment advisers. According to Baker, and amendment to the Dodd-Frank Act was proposed with bipartisan support because of a fear that the Dodd-Frank legislation may have had the effect of making it difficult, if not impossible, for the public to find out information the SEC had acquired about the entities it regulates, including advisers:

Section 929I of the Dodd-Frank Act amended the Securities Exchange Act of 1934, the Investment Company Act of 1940, and the Investment Advisers Act of 1940 to provide strong protection from disclosure for SEC records related to its oversight of registered persons. The breadth of the protection has led to concern that it is overprotective of the SEC itself, and a bipartisan consensus to narrow the protection quickly emerged in Congress. S. 3717 repeals Section 929I, replacing it with a clarification that the SEC's records are entitled to the same kind of protection under FOIA as that extended by 5 U.S.C. § 552(b)(8) to other agencies responsible for the regulation or supervision of financial institutions.

The issue identified by Baker, from the perspective of advisers, is that the amendment may make information collected by the SEC during its exams investigations of advisers open to FOIA (Freedom of Information Act) requests from the public.  That is, if the amendment is passed, anyone could file a request to obtain this otherwise confidential information collected by the SEC.  

The full text of John Baker's article is available at: