Key Takeaway:
- In August 2023 the Securities and Exchange Commission adopted
final rules that sought to implement sweeping changes to the
private funds industry. The Fifth Circuit Court of Appeals issued a
decision today vacating the rule on the grounds that it exceeded
the SEC's statutory rulemaking authority.
In a 3-0 decision issued today, June 5, 2024, the Fifth Circuit
Court of Appeals (the “Court”) vacated the new private
funds rule adopted by the Securities and Exchange Commission (the
“SEC”) on August 23, 2023 (the “Rule”). The
Court held that the SEC exceeded its statutory authority in
adopting the Rule. Prior to the Court's decision, the
compliance dates for the primary substantive provisions of the Rule
(including quarterly reporting requirements for private funds,
prohibited activities restrictions relating to permissible fund
terms, private fund audit requirements and provisions relating to
adviser-led secondaries) were September 14, 2024, for
