After foreboding words at the end of 2021 about changes he would like to see to the private funds industry, SEC Chair Gary Gensler has followed up with a veritable avalanche of proposed amendments and regulations. Most prominently, the SEC proposed changes to Form PF along with new and amended rules for private fund advisers under the Investment Advisers Act of 1940 (Advisers Act). As drafted, the proposed amendments impose new – and, some have argued, unnecessarily onerous – reporting requirements, burdens and restrictions on fund managers. Morgan Lewis attorneys detailed the features and flaws of the SEC’s proposed amendments in a recent webinar featuring partners Christine M. Lombardo, Courtney C. Nowell, Jedd H. Wider and Joseph D. Zargari. This first article in a two-part series details key features of the proposed amendments to Form PF that are relevant to PE sponsors, as well as those in the amendments to the Advisers Act relating to the audit rule, annual compliance reviews and adviser-led secondary transactions. The second article
will outline proposed changes to the Advisers Act to introduce new quarterly reporting requirements, as well as to prohibit certain activities and types of preferential treatment of investors. See “Practical Impact on PE Sponsors of the Proposed Amendments to Form PF and Reasons for Industry Backlash (Part Two of Two)
” (Mar. 1, 2022).