The U.S. Securities and Exchange Commission (SEC) has introduced new rules and amendments aimed at regulating private fund advisers and updating compliance rules for all investment advisers.
These changes are intended to boost transparency, competition , and efficiency in the privateequity funds market, ultimately safeguarding the interests of private fund investors. Recognizing the crucial role of private funds and their advisers in various sectors of the capital markets, the SEC aims to empower investors with comprehensive insights into their overall portfolio returns and costs , enabling them to make well-informed decisions and optimize their investment portfolios.
The rules will require registered private fund advisers to provide quarterly statements disclosing fund fees, expenses, and performance to investors, as well as annual financial statement audits. The SEC will also prohibit preferential treatment that negatively impacts other investors, with some exceptions and disclosure requirements. Additionally, certain activities contrary to the public interest and investor protection will be restricted. Legacy status provisions will be applied to existing governing agreements to minimize renegotiations, ensuring that investors have the tools needed to navigate their investments effectively.