Company: DBRG
Filing Date: 2025-02-21
Form Type: 10-K
Source: 0001679688-25-000017
Chunk: 84

Company: DigitalBridge Group, Inc.
Filing Date: 2025-02-21
Form: 10-K
Item: Item 1A
Chunk 84
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 sanction imposed against us or our personnel by a regulator were small in monetary amount, the costs incurred in responding to such matters could be material and the adverse publicity relating to the investigation, proceeding or imposition of these sanctions could harm our reputation and cause us to lose existing investors or fail to gain new investors or discourage others from doing business with us.

In addition, we regularly rely on exemptions from various requirements of the Securities Act, the Exchange Act, the 1940 Act, the Commodity Exchange Act and ERISA in conducting our investment activities in the United States. Similarly, in conducting our investment activities outside the United States, we rely on available exemptions from the regulatory regimes of various foreign jurisdictions. These exemptions from regulation within the United States and abroad are sometimes highly complex and may, in certain circumstances, depend on compliance by third parties whom we do not control. If for any reason these exemptions were to become unavailable to us, we could become subject to regulatory action or third-party claims and our business could be materially and adversely affected. Moreover, the requirements imposed by our regulators are designed primarily to ensure the integrity of the financial markets and to protect investors in our funds and are not designed to protect our stockholders. Consequently, these regulations often serve to limit our activities and impose burdensome compliance requirements.

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The SEC recently adopted amendments to Form PF that enhance reporting obligations for private fund advisors and to Regulation S-P, which requires, among other things, that private fund advisors adopt written policies and procedures for an incident response program to address unauthorized access to customer information. The SEC has also proposed, and can be expected to propose, additional rules and rule amendments under the Investment Advisers Act including in respect of custody requirements, cybersecurity risk governance, disclosures regarding how ESG factors are taken into consideration in investment strategies, the use of predictive data analytics or similar technologies and the outsourcing of certain functions to service providers (the “Proposed Rules”).

The Proposed Rules, to the extent adopted, are expected to significantly increase compliance burdens and associated costs and complexity. This regulatory complexity, in turn, may increase the need for broader insurance coverage by fund managers and increase such costs and expenses. The amendments and Proposed Rules may also increase the cost of entering into and maintaining relationships with service providers to the Company and its managed funds and could expose us to additional regulatory scrutiny, litigation, censure and penalties for noncompliance or perceived noncompliance, which could adversely affect our reputation and business. 

In addition to the U.S. legislation described above, other jurisdictions, including many European jurisdictions