ARTICLE · 13 AUGUST 2009

SEC’s Proposed “Pay-To-Play” Restrictions Will Affect Private Equity Funds

Torys LLP

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The Securities and Exchange Commission (SEC) has proposed a new rule titled “Political Contributions by Certain Investment Advisers” designed to prevent advisers, including the management companies of private equity funds, from making political contributions or hidden payments in order to be rewarded with, or given the opportunity to compete for, contracts to manage the assets of public pension plans and other government accounts.

United StatesFinance and Banking

Joseph Romagnoli

Amy Johnson-Spina

The Securities and Exchange Commission (SEC) has proposed a new rule titled "Political Contributions by Certain Investment Advisers" designed to prevent advisers, including the management companies of private equity funds, from making political contributions or hidden payments in order to be rewarded with, or given the opportunity to compete for, contracts to manage the assets of public pension plans and other government accounts. This proposal has been made in response to widely reported "pay-to-play" scandals.

On July 22, 2009, the SEC voted unanimously to propose the rule for a 60-day public comment period ending on October 6, 2009.

Application Of The Rule To Private Equity Funds

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