On June 12, 2025, the SEC announced the withdrawal of 14 pending rule proposals that were issued as far back as February 2022, including proposed rulemakings with respect to cybersecurity requirements for funds and investment advisers, ESG disclosures by funds and advisers, outsourcing by advisers, safeguarding advisory client assets, and conflicts of interest in the use of artificial intelligence and similar technologies by advisers and broker-dealers, among others. The SEC stated its current intention not to issue final rules with respect to the withdrawn proposals and advised that if the SEC decides to pursue future regulatory action in any of these areas, it will issue a new rule proposal.

The withdrawn rule proposals include:

Cybersecurity rules for funds and investment advisers. If adopted, the proposed rules under the Investment Company Act and Investment Advisers Act would have required funds and investment advisers to adopt and implement written cybersecurity policies and procedures, advisers to report significant cybersecurity incidents to the SEC and certain disclosures to be made by funds and advisers regarding cybersecurity risks and incidents. (Proposed: February 9, 2022, related Vedder Price article available here)

ESG disclosures by funds and investment advisers. If adopted, the proposed rule amendments under the Investment Company Act and Advisers Act would have required additional disclosure regarding ESG investment practices in fund registration statements, fund shareholder reports and adviser Form ADVs. (Proposed: May 25, 2022, related Vedder Price article available here)

Exclusion of shareholder proposals in proxy statements. If adopted, the proposed amendments to Rule 14a-8 under the Securities Exchange Act of 1934 would have allowed a company to exclude shareholder proposals based on revised exclusion criteria. (Proposed: July 13, 2022, related Vedder Price article available here)

Outsourcing by investment advisers. If adopted, the proposed rule under the Advisers Act would have required investment advisers to conduct due diligence prior to hiring a service provider to perform certain “covered functions” and to periodically monitor the service provider’s performance and reassess its retention. (Proposed: October 26, 2022, related Vedder Price article available here)

Regulation Best Execution and order competition rule. If adopted, the proposed rules under the Exchange Act would have changed the existing regulatory framework concerning broker-dealers’ duty of best execution, including by requiring an annual review of best execution policies, with reporting to boards or other governing bodies, and requiring public reporting on execution quality. In addition, a proposed rule under Regulation NMS would have required broker-dealers that receive marketable orders from retail investors below a certain size to first route those orders to newly designed securities auctions, rather than execute them internally or with a market maker. (Proposed: December 14, 2022, related Vedder Price article available here)

Reporting of large security-based swap positions. If adopted, the proposed rules under the Exchange Act would have required that large positions in security-based swaps and related securities be reported to the SEC and publicly disseminated. (Proposed: December 15, 2021, related Vedder Price article available here)

Safeguarding advisory client assets. If adopted, the proposed new rule and amendments to the current custody rule under the Advisers Act would have expanded the custody rule to cover a broader set of client assets and advisory activities, and also would have enhanced the custodial protections that client assets receive under the custody rule. (Proposed: February 15, 2023)

Conflicts of interest in the use of artificial intelligence and similar technologies. If adopted, the proposed rules under the Exchange Act and the Advisers Act would have imposed new requirements on broker-dealers and investment advisers intended to address conflicts of interest in their use of predictive data analytics and similar technologies, such as artificial intelligence, in investor interactions. The proposal sought to prevent firms from using these technologies to influence investor behavior to the investor’s detriment and the benefit of the firm. (Proposed: July 26, 2023, related Vedder Price article available here) 

The SEC’s notice of withdrawal of the proposed rules is available here. The SEC’s rulemaking activity page is available here.