A Practical Guide to Interpreting the New SEC Private Fund Adviser Rules

Skadden, Arps, Slate, Meagher & Flom LLP

John M. Caccia Heather Cruz Greg Norman Anastasia T. Rockas David A. Jain

On August 23, 2023, the Securities and Exchange Commission (the SEC) voted 3-2 to adopt a final set of rules and amendments under the Investment Advisers Act of 1940 (collectively, the Final Rules) that significantly expand the regulatory compliance requirements for private fund advisers (both registered and not registered), exempt reporting advisers, State-regulated advisers, advisers relying on the foreign private adviser exemption and all other registered advisers. This alert includes a reference guide that presents a detailed summary of the Final Rules, along with selected commentary derived from the SEC’s adopting release that provides interpretive background and guidance from the SEC that should be helpful to investment advisers and private fund advisers as they determine how to properly read, apply and implement the requirements set forth in the Final Rules.

In response to the SEC’s approval of the Final Rules, the Alternative Investment Management Association and the Managed Funds Association, along with four other industry bodies, filed a lawsuit with the Fifth Circuit Court of Appeals in New Orleans challenging the adoption of the Final Rules, claiming that the SEC overstepped its legal authority. We will explore developments regarding this lawsuit (and any other legal actions that may be brought against the SEC in connection with the adoption of the Final Rules) in a subsequent alert.

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