Seward & Kissel Briefing on the SEC private fund adviser final rules

On 25 August 2023, Seward & Kissel, our alliance firm for hedge fund and asset management work, published a client briefing (the Briefing) of the SEC’s new private fund adviser rules, adopted on 23 August 2023.

As noted in our high level report, the package of measures includes both new rules and amendments to existing rules under the Investment Advisers Act of 1940 with respect to the regulation of private fund advisers. The changes are designed to protect private fund investors by

• increasing transparency into certain practices
• addressing practices that can lead to investor harm and
• restricting practices that are contrary to the protection of investors.

Seward & Kissel’s summary of final rules

The Briefing looks in turn at final rules applicable to

Registered Private Fund Advisers

• the Quarterly Statement Rule
• the Audit Rule
• the Adviser-Led Secondaries Rule and
• Books and Records Rule Amendments.

All Private Fund Advisers

• Restricted Activities Rule
• Preferential Treatment Rule and
• Legacy Status.

All Registered Advisers

• Compliance Rule Amendments.

Key modifications

The Briefing then examines the principal changes made to the rules as proposed in February 2022 in the areas of

• the Waiver or Indemnification Prohibition
• the Adviser Clawback for Taxes
• the Preferential Treatment Rule
• the Restricted Activities Rule
• the Audit Rule
• the Quarterly Statement Rule
• the Adviser-Led Secondaries Rule and
• rules in relation to Securitized Asset Funds.

For more information on the private fund adviser rules, contact an attorney at Seward & Kissel (see the list at the foot of the Briefing) or Devarshi Saksena, Lucian Firth or Sarah Crabb.