SEC proposes new rules targeted at GP-led transactions

“SEC proposes new rules targeted at GP-led transactions,” an article by Akin Gump investment management partner Fadi Samman, counsel Amanda Butler-Jones and senior counsel Krishna Skandakumar, has been published by Reuters.

The article discusses what the authors characterize as “sweeping new rules” proposed by the U.S. Securities and Exchange Commission that will have an impact on registered and unregistered private fund advisers alike. The rules’ goal: to provide greater transparency and increase competition and efficiency in the ca. $18 trillion private funds industry. The authors write, “The proposed rules represent a shift to direct regulation on a scale never seen before in this segment of the industry.”

The authors discuss two key rules that have the potential of changing the general partner, or GP,-led landscape: “First, the proposed Form PF (private fund) amendments would require an adviser to report any GP-led transaction within one business day of completion. Second, the proposed GP-led rule would require a registered adviser to obtain a fairness opinion from an independent opinion provider in connection with any GP-led transaction.”

They look at each of the two amendments in detail, then close by noting that many of the concerns raised against these two proposed changes center on the additional expense and burden for advisors that could be passed down to investors. They close by noting, “Throughout the comment period, it is expected that advisers and investors alike will share whether the proposed rules actually address the concerns raised by the SEC or whether alternative approaches should be presented.’

To read the full article, click here.