SEC Regulatory Updates for Private Equity Firms

The Securities and Exchange Commission (SEC) announced recently that it intends to revise some reporting requirements for private equity firms, though the agency offered few details.

The news came from the SEC’s Office of Information and Regulatory Affairs and its annual Unified Agenda of Regulatory and Deregulatory Actions, which was released on June 11. The Agenda includes short- and long-term regulatory actions that administrative agencies plan to take.

According to the news website Middle Market Growth, at least some of the revisions the SEC wants to make concern Form PF, which advisors to private funds use to report certain information about those funds to the commission. It is intended to be used by funds with more than $150 million in assets under management.

The SEC’s press release cited proposed rulemaking changes related to “unfinished work directed by the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010” – which likely refers to the shifting exemptions in private fund reporting since the Great Recession of 2008 and 2009.

“To meet our mission of protecting investors, maintaining fair, orderly, and efficient markets, and facilitating capital formation, the SEC has a lot of regulatory work ahead of us,” said SEC Chair Gary Gensler. “I look forward [to] collaborating with my fellow commissioners and the dedicated staff to propose and finalize rules that will strengthen our markets, increase transparency, and safeguard investors.” 

What those proposed and finalized rules will be, specifically, is unclear. The Wall Street Journal cited industry attorneys who are advising firms to expect more scrutiny on how fund managers calculate the value of fund assets, as well as their progress toward environmental, social, and governance promises.

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