SEC Enacts Significant Compliance Reforms For Advisers To Private Funds

I. Introduction:On August 23, 2023, the SEC approved a set of final rules under the Investment Advisers Act of 1940 (the "Advisers Act") applicable to investment advisers of private funds (the "Private Funds Rules") as well as one rule applicable to all registered investment advisers (the "New Compliance Rule") ¹. The rules were first proposed in February 2022 ² ("Proposed Rules") and represent the most impactful changes applicable to investment advisers of private funds since the changes implemented as a part of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 in response to the global financial crisis. Although the Private Funds Rules will become effective sixty days following publication in the Federal Register, investment advisers covered by the Private Funds Rules ³ will have 12-18 months following publication to comply. ⁴ Nonetheless, we encourage advisers of private funds to understand fully their obligations under the Private Funds Rules