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Private Fund Adviser (PFA) Rules

Private Fund Adviser (PFA) Rules

12 October 2023

In an ever-evolving regulatory landscape, changes to reporting requirements play a pivotal role in shaping how the investment industry operates. The Securities and Exchange Commission’s (SEC) issuance of new private fund adviser rules and amendments under the Investment Advisers Act 1940 marks a significant transformation in the regulation of private fund advisers. These rules are designed to address longstanding challenges and concerns in the private fund industry, aiming to safeguard the interests of investors while fostering greater transparency, governance, and fairness.

The private fund industry has experienced remarkable growth, with assets under management (AUM) reaching staggering figures. However, this growth has been coupled with inconsistencies in reporting practices and conflicts of interest. The new Private Fund Adviser Rules seek to address these issues and usher in a new era of accountability and transparency.

This comprehensive publication provides a detailed overview of the critical aspects of the PFA Rules, offering valuable insights into their scope, implications, and compliance requirements. It covers seven significant components of the rules: the Quarterly Statements Rule, Audit Rule, Adviser-Led Secondaries Rule, Restricted Activities Rule, Preferential Treatment Rule, Annual Review Rule, and Recordkeeping Rule. These rules are explained thoroughly, offering a roadmap for private fund advisers to navigate the regulatory transformation.