The SEC And Management Fee Offset And Step-down Enforcement Actions–Not Without Warning

Introduction

As we previously wrote, the Securities and Exchange Commission (the "SEC") proposed several rules that would impose additional requirements on private fund managers ("Managers"), many of which relate to various types of disclosure and associated conflict mitigation and other practices. Given the SEC's evergreen focus on management fee offsets and step-downs and the new proposed rules, Managers should expect to see the SEC examine Managers' management fee offset and step-down disclosure policies and procedures. Therefore, this article will specifically highlight the SEC's focus on management fee offsets and step-downs and examine certain related SEC enforcement actions and related guidance.