SEC Proposes Enhanced Disclosures for Private Equity and Hedge Funds

Kelley Howes spoke to Compliance Week about the U.S. Securities and Exchange Commission’s (SEC) vote to propose a rule that would require hedge funds and private equity funds to provide detailed information on fees, expenses, and performance on a quarterly basis. 

“These investment advisers to private funds, like all advisers, are fiduciaries. There’s never been a question about that,” Howes said. “They have to act in the best interest of their clients.”

Private fund advisers “may already be disclosing this information, maybe not every quarter and maybe not in the same way,” Howes said. These firms will have to implement new policies and procedures to meet these new reporting requirements “There is going to be a cost to comply with it,” she said.

Other requirements, like the mandate private funds undergo annual audits, are not as big a deal, Howes said. “The vast majority of private fund advisers already do that,” she said.

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