SEC Final Rules And The Impact On Canadian Advisers

The Securities and Exchange Commission (the SEC) adopted new and somewhat controversial rules and rule amendments (the Final Rules) under the U.S. Investment Advisers Act of 1940 (the Act) in the fall of 2023 that impact the regulation of private fund advisers (Advisers). Under the Final Rules, Advisers registered under the Act will have increased compliance burdens and requirements regarding transparency to investors. The Final Rules also create additional prohibitions on all Advisers operating in the United States in relation to specified activities.

Since 2010, the SEC has established greater reporting and recordkeeping requirements for registered Advisers with a view to protect investors. The Final Rules expand on the existing regulatory regime and require Advisers to provide investors with more detailed information in the private funds context relating to investments, costs, and material economic terms including performance metrics and the preferential