On June 12, 2025, various divisions within the Securities and Exchange Commission (“SEC”) formally withdrew a number of pending proposed rules which would have affected investment advisers, investment companies, and broker-dealers.

The withdrawn proposed rules are listed below.  The SEC’s release regarding these withdrawals can be found here.

• Withdrawn rules that had been proposed by the Division of Investment Management:
  • Safeguarding Advisory Client Assets (see prior S&K Guidance here)
  • Cybersecurity Risk Management for Investment Advisers, Registered Investment Companies, and Business Development Companies (see prior S&K Guidance here)
  • Enhanced Disclosures by Certain Investment Advisers and Investment Companies About Environmental, Social, and Governance Investment Practices (see prior S&K Guidance here)
  • Outsourcing by Investment Advisers (see prior S&K Guidance here)
  • Conflicts of Interest Associated with the Use of Predictive Data Analytics by Broker-Dealers and Investment Advisers (see prior S&K Guidance here)

• Withdrawn rules that had been proposed by the Division of Trading and Markets:
  • Regulation Best Execution (see prior S&K Guidance here)
  • Conflicts of Interest Associated with the Use of Predictive Data Analytics by Broker-Dealers and Investment Advisers (see prior S&K Guidance here)
  • Prohibition Against Fraud, Manipulation, and Deception in Connection With Security-Based Swaps; Prohibition against Undue Influence over Chief Compliance Officers
  • Volume-Based Exchange Transaction Pricing for NMS Stocks
  • Order Competition Rule
  • Regulation Systems Compliance and Integrity
  • Cybersecurity Risk Management Rule for Broker-Dealers, Clearing Agencies, Major Security-Based Swap Participants, the Municipal Securities Rulemaking Board, National Securities Associations, National Securities Exchanges, Security-Based Swap Data Repositories, Security-Based Swap Dealers, and Transfer Agents
  • Supplemental Information and Reopening of Comment Period for Amendments to Exchange Act Rule 3b-16 Regarding the Definition of “Exchange”
  • Proposed Amendments to the National Market System Plan Governing the Consolidated Audit Trail To Enhance Data Security

• Withdrawn rules that had been proposed by the Division of Corporation Finance:
  • Substantial Implementation, Duplication, and Resubmission of Shareholder Proposals Under Exchange Act Rule 14a-8

The withdrawal of the proposed rules follows Chair Atkins’s June 3, 2025 Congressional testimony, where he stated that “[t]he SEC is returning rulemaking to regular order. Our comment periods will not be artificially short, and the public will have ample time to provide feedback. The SEC will also be sure to take into consideration how rules overlap and how regulatory burdens build, in keeping with our obligation to consider their costs and benefits.”

Please contact an attorney in the Investment Management Group at Seward & Kissel LLP if you have any questions regarding the proposed rules that have been withdrawn.