In a dramatic shift on June 12, 2025, the U.S. Securities and Exchange Commission (SEC) withdrew 14 proposed rulemakings, many of which had been poised to reshape compliance for asset managers and private capital firms. From cybersecurity and predictive analytics to ESG disclosures and custody reform, these now-shelved initiatives had triggered months—if not years—of planning and investment.
While headlines focused on deregulation, what’s being missed is the whitespace left behind. For COOs, CFOs, compliance leads, and fund managers, the question isn’t what’s been rolled back; it’s what remains, and how best to move forward.
Strategic Insight: A Pause Becomes a Pivot
As a middle office services provider, we don’t view this as a regulatory retreat. We see it as a shift in terrain. Without formal guidance, firms are left to navigate gray areas alone. That’s where strategic leadership, not just compliance, matters most.
Across asset management and private capital, the energy invested in regulatory readiness is now suspended in midstream. Policies were drafted. Workflows were engineered. Governance frameworks were set in motion. However, that effort isn’t wasted. It provides momentum that can be redirected toward operational strength and future readiness and resilience.
Does Less Regulation Mean Less Risk?
It's tempting to think so. But the market tells a different story. Cyber threats are growing. AI risk governance is still evolving. ESG expectations haven’t disappeared. Regulation or not, the pressure to demonstrate responsible operations remains.
This is where the middle office steps in—not just to respond, but to lead. The goal is no longer just compliance. It’s building resilient, modular operations that enable agility, transparency, and trust.
What’s Changed Since the Original SEC Proposals?
The SEC’s decision under Chair Paul Atkins has walked back many of the expansive policies set under former Chair Gary Gensler. These included:
- Cybersecurity Risk Management for Advisors and Broker-Dealers
- Predictive Data Analytics oversight
- Custody rule rewrites impacting digital assets
- ESG disclosure mandates
- Market structure reforms, such as Best Execution and Order Competition rule
Firms had prepared for these changes with urgency, building cross-functional task forces and deploying new systems. The June withdrawal has left much of that work incomplete, but not irrelevant. The risk domains still exist, even without a federal directive.
5 Strategic Takeaways for Operations Leaders
1. The rules are gone. The risks are not. Cybersecurity, AI governance, and custodial oversight remain active concerns. The need for action hasn’t disappeared—only the deadlines.
2. Deregulation = whitespace. Without prescriptive policy, firms that move first can define what good looks like. This is an opportunity to lead by example.
3. Being proactive builds trust. Regulatory cycles may pause, but investors expect continuity. Staying "reg-ready" reinforces operational maturity.
4. Resilient infrastructure is strategic infrastructure. Middle office operations must support modular policy design and fast adaptation. This is now a competitive edge, especially for private credit.
5. Operational agility is a value proposition. For asset managers and private capital firms, demonstrating flexibility and control in the middle office strengthens your pitch to investors and stakeholders.
Operational Partnership: Our Focus at Linedata
As middle and back-office partners to many of the biggest names in the industry, we’re:
- Monitoring regulatory shifts—like withdrawn SEC proposals—and reconciling them against our clients’ existing operations to flag potential impact areas
- Helping clients stay ahead of changes by identifying where shifts in regulation may influence operational workflows, data handling, and portfolio support requirements
- Strengthening support for custodial oversight, cybersecurity and cyber resilience, and AI governance
- Supporting private capital firms with operational tools that keep pace with bespoke deal structures and complex investor demands
- Reinforcing the principle that operational excellence shouldn't depend on regulatory pressure. Put simply, we’re not waiting for regulators to tell us what “good” looks like
Bottom Line: Think Opportunities
Regulatory resets like this don’t eliminate risk; they redistribute it. They create a vacuum that forward-thinking firms can fill. For operations leaders in asset management and private capital, the real advantage now lies in turning preparedness into purpose.
This is a moment to modernize infrastructure, reinforce investor confidence, and lead with conviction, whether or not the rules are written.
Explore Linedata’s Middle Office Services Offering
Linedata’s Middle and Back Office Services help asset managers, hedge funds, and private capital firms achieve operational alpha without waiting for mandates. From custodial oversight to ESG and cybersecurity support, our solutions help you adapt quickly, build resilience, and stay ahead of what’s next.
About the author, Marcela Crossman
Marcela Crossman is Head of Middle and Back Office Services at Linedata. With over two decades of leadership in asset servicing and operational strategy she brings deep expertise in helping asset managers and alternative investment firms scale efficiently while maintaining control and oversight.
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