ARTICLE
12 November 2024

Compliance Outreach Program: Private Funds Panel

KG
K&L Gates LLP

Contributor

At K&L Gates, we foster an inclusive and collaborative environment across our fully integrated global platform that enables us to diligently combine the knowledge and expertise of our lawyers and policy professionals to create teams that provide exceptional client solutions. With offices spanning across five continents, we represent leading global corporations in every major industry, capital markets participants, and ambitious middle-market and emerging growth companies. Our lawyers also serve public sector entities, educational institutions, philanthropic organizations, and individuals. We are leaders in legal issues related to industries critical to the economies of both the developed and developing worlds—including technology, manufacturing, financial services, health care, energy, and more.
On 7 November 2024, the US Securities and Exchange Commission's (SEC) Divisions of Examinations, Investment Management, and Enforcement hosted a virtual panel on compliance and enforcement topics.
United States Corporate/Commercial Law

On 7 November 2024, the US Securities and Exchange Commission's (SEC) Divisions of Examinations, Investment Management, and Enforcement hosted a virtual panel on compliance and enforcement topics as part of its broader National Compliance Outreach Seminar. This blog post provides a high-level overview of the private fund topics that were covered, but the agenda included a broad array of additional topics.

  1. Marketing Rule Compliance
    Shane Cox of the Division of Examinations discussed extracted performance, net performance, hypothetical performance, and performance substantiation issues under the Marketing Rule. He also encouraged advisers to consider whether certain communications made through intermediaries constitute "advertisements" under the Rule.
  2. Form PF
    Adele Kittredge Murray of the Division of Investment Management summarized two recently adopted amendments to Form PF and related reporting requirements for advisers. Form PF is an SEC examination priority for 2025.
  3. MNPI Policies
    Lee A. Greenwald of the Division of Enforcement discussed the recent SEC enforcement actions dealing with material nonpublic information (MNPI), including for CLO trading and information received through ad hoc creditor committees. He encouraged advisers to ensure that their MNPI policies are tailored to address unique components of their business lines.
  4. Valuation
    The panelists also discussed challenges with valuing private credit investments. They encouraged advisers to disclose in their fund documents how a deterioration in the value of a private credit investment would affect fees payable to the adviser.
  5. Form ADV Fee and Expense Disclosures
    Finally, the panelists encouraged advisers to ensure that they include in their Form ADV brochures fulsome disclosures of fees and expenses charged to clients.

Our lawyers are available to advise private fund advisers on these and other compliance matters.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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