SEC Issues Trifecta of Rules and Alerts Impacting the Investment Industry

On August 23, 2023 the U.S. Securities and Exchange Commission (SEC) issued a trifecta of rules and alerts that impact the investment industry, including private funds and broker-dealers.

Regulation of Private Fund Advisors

The long-awaited adoption of new rules and rule amendments to enhance the regulation of private fund advisers was released. At a high level, the rule has the following main requirements:

  • Registered private fund advisers must provide quarterly statements to investors detailing certain information about fees, expenses, and performance.
  • Registered private fund advisers must obtain an annual audit of each private fund and distribute that audit to its investors.

We are in the process of evaluating and summarizing the 660 page rule, but if you’d like to get a head start, you can view the SEC’s press release or the final rule (IA-6383).

Extension of Safeguarding Rule Comment Period

The SEC reopened the comment period of its proposed Safeguarding Rule. The initial comment period ended on May 8, 2023; however, it will now remain open for the next 60 days. For our summary of the proposed rule, you can read our article here.

Amendments to Exemption from National Securities Association Membership

The SEC adopted amendments that narrow the exemption from Section 15(b)(8) of the Securities Exchange Act of 1934, which generally requires a broker or dealer registered with the SEC to become a member of a national securities association. FINRA, or the Financial Industry Regulatory Authority, is the only registered national securities association. For further detail, you can view the SECs press release or the final rule (release number 34-98202).

If you have any questions about this information or would like to discuss your firm’s needs, please contact Kreischer Miller’s Investment Industry Group.


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