The SEC's New Private Fund Adviser Rules: A Guide To Compliance

EXECUTIVE SUMMARY

On 23 August 2023, the US Securities and Exchange Commission (the SEC) adopted a new set of private fund adviser rules (each a Rule and, collectively, the Rules, and the related release, the Adopting Release)¹ that materially increase the regulatory burden placed on investment advisers to private funds² under the Investment Advisers Act of 1940, as amended (the Advisers Act), while also providing new rights to investors. While not as extensive as the rule package originally proposed by the SEC in February 2022 (the Proposal),³ the Rules will nevertheless have a significant impact on private fund advisers, the investors in their funds and the private funds industry as a whole.⁴ We expect the Rules' disclosure- and consent-based framework and audit and quarterly reporting requirements will both expand the scope of and add to the substantial regulatory burden faced by advisers to private funds and, together with other rulemaking affecting private