SRZ Submits Comment Letter on SEC's Proposed Outsourcing Rule

On Dec. 27, 2022, Schulte Roth & Zabel submitted comments to the U.S. Securities and Exchange Commission (“SEC”) on the agency's proposed rule related to outsourcing by registered investment advisers.

SRZ believes the Proposed Rule is overly broad in coverage, would impose a standardized approach to a wide range of facts and circumstances and would potentially discourage advisers from using service providers despite the benefits that can come from their specialized areas of expertise. SRZ also believes that the Commission’s existing rules are sufficient to address circumstances where an adviser is deficient in its due diligence and oversight of service providers.

SRZ is carefully following the development of new rules affecting investment advisers and invites continued dialogue on these matters.