In an Aug. 25 opinion that many will consider a victory for the hedge fund community, the U.S. Court of Appeals for the Fifth Circuit upheld a challenge to two Biden-era Securities and Exchange Commission (SEC) rules requiring disclosure of securities lending and short sale activity. If the SEC wishes to save the rules, it now will have to conduct a new analysis of their cumulative economic impact. ( National Association of Private Fund Managers v. SEC, No. 23-60626, 5th Cir. Aug. 25, 2025).

Securities Lending and Short Sale Rules

The provisions at issue are Rule 10c-1a and Rule 13f-2 under the Exchange Act (together, the “Rules”). They arose from a Dodd-Frank mandate to increase transparency around securities lending and short selling activity. The Rules proceeded through the SEC pr

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