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Earlier this year, the Securities and Exchange Commission (SEC) proposed new rules under the Investment Advisers Act of 1940, requesting additional transparency from private fund advisers.

As summarized by the SEC in a fact sheet, the proposed rules:

  • “Require private fund advisers registered with the SEC to provide investors with quarterly statements detailing information about private fund performance, fees, and expenses;
  • Require registered private fund advisers to obtain an annual audit for each private fund and cause the private fund’s auditor to notify the SEC upon certain events;
  • Require registered private fund advisers, in connection with an adviser-led secondary transaction, to distribute to investors a fairness opinion and a written summary of certain material business relationships between the adviser and opinion provider;
  • Prohibit all private fund advisers, including those that are not registered, from engaging in certain activities and practices that are contrary to the public interest and the protection of investors; and
  • Prohibit all private fund advisers from providing certain types of preferential treatment that have a material negative effect on other investors, while also prohibiting all other types of preferential treatment unless disclosed to current and prospective investors.”

In addition to requesting additional time and opportunities to provide feedback, NACUBO’s comment letter raised a number of concerns, including:

  • Unintended consequences related to the prohibition on disclosing preferential information;
  • A potential material increase in expenses as a result of the proposed rules;
  • The approach to the standard of care
  • Implications for emerging managers.

NACUBO continues to welcome your input on this topic. If you have comments or concerns that you would like to share on this rulemaking, please contact Liz Clark, vice president, policy and research, at


Liz Clark

Vice President, Policy and Research


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