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SEC RIN: 3235-AN18 Publication ID: Spring 2024 
Title: Outsourcing by Investment Advisers 

The Division is considering recommending that the Commission adopt rules related to the oversight of third-party service providers.  The Commission proposed a new rule under the Investment Advisers Act of 1940 to prohibit registered investment advisers ("advisers") from outsourcing certain services or functions without first meeting minimum requirements. The proposed rule would require advisers to conduct due diligence prior to engaging a service provider to perform certain services or functions. It would further require advisers to periodically monitor the performance and reassess the retention of the service provider in accordance with due diligence requirements to reasonably determine that it is appropriate to continue to outsource those services or functions to that service provider. The Commission also proposed corresponding amendments to the investment adviser registration form to collect census-type information about the service providers defined in the proposed rule. In addition, the Commission proposed related amendments to the Advisers Act books and records rule, including a new provision requiring advisers that rely on a third party to make and/or keep books and records to conduct due diligence and monitoring of that third party and obtain certain reasonable assurances that the third party will meet certain standards.

Agency: Securities and Exchange Commission(SEC)  Priority: Substantive, Nonsignificant 
RIN Status: Previously published in the Unified Agenda Agenda Stage of Rulemaking: Final Rule Stage 
Major: Undetermined  Unfunded Mandates: No 
CFR Citation: 17 CFR 275.204-2(a)(24) (NEW)    17 CFR 275.204-2(e)(4) (NEW)    17 CFR 275.204-2(l) (NEW)    17 CFR 275.206(4)-11 (NEW)   
Legal Authority: 15 U.S.C. 10b-3    15 U.S.C. 10b-4    15 U.S.C. 10b-11    15 U.S.C. 77s(a)    15 U.S.C. 78w(a)    15 U.S.C. 78bb(e)(2)    15 U.S.C. 7sss(a)    15 U.S.C. 80a-37(a)   
Legal Deadline:  None
Action Date FR Cite
NPRM  11/16/2022  87 FR 68816   
NPRM Comment Period End  12/27/2022 
Final Action  10/00/2024 
Regulatory Flexibility Analysis Required: YES  Government Levels Affected: Undetermined 
Small Entities Affected: Businesses  Federalism: Undetermined 
Included in the Regulatory Plan: No 
RIN Data Printed in the FR: Yes 
Agency Contact:
Jennifer Porter
Senior Special Counsel, Division of Investment Management
Securities and Exchange Commission
100 F Street NE,
Washington, DC 20549
Phone:202 551-6739