CLOs Excluded From SEC's New Private Fund Advisers Rules

On Aug. 23, 2023, the Securities and Exchange Commission ("SEC") adopted a new series of rules and amendments ("Release") under the Investment Advisers Act of 1940 ("Advisers Act"), which will apply to private fund managers and advisers registered with the SEC.¹ The newly adopted rules are meant to regulate the activities of investment advisers managing private funds.²

The rules adopted by the SEC require private fund advisers to: (i) provide quarterly statements to investors, (ii) provide an annual audit for each private fund, (iii) provide fairness or valuation opinions for adviser-led secondary transactions, (iv) require disclosure and in some cases investor consent for activities contrary to the public interest, and (v) prohibit preferential treatment to investors in a private fund (unless disclosed).³ However, in the Release, the SEC said that the five private fund adviser rules do not apply to investment advisers ("SAF advisers") with respect to