SEC Proposes New Rules Affecting Private Fund Advisers

On February 9, 2022, the Securities and Exchange Commission (the SEC) proposed new rules under the Investment Advisers Act of 1940 (the Advisers Act), focused on private fund disclosures and sponsor practices.  The SEC's stated goal is to increase investor protection and transparency. The SEC has proposed a 60-day comment period and the compliance period for implementing the new rules is expected to be one year after publication of the final rules in the Federal Register.

The proposed rules address the following categories of changes:

1. Quarterly reports and standardized performance disclosure: Registered private fund advisers would be required to prepare a quarterly statement that includes certain information regarding fees, expenses and performance and distribute such statements to investors within 45 days after each calendar quarter. The quarterly statements are proposed to include the following disclosures in a table format: (a) compensation to the adviser