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SEC Proposes Sweeping New Rules and Amendments to Existing Rules Applicable to Private Fund Advisers

Client memorandum | February 10, 2022

On February 9, 2022, the Securities and Exchange Commission (“SEC”) voted 3-1 in favor of proposed new rules and rule amendments (the “Proposal”) under the Investment Advisers Act of 1940 (the “Advisers Act”) applicable to private fund advisers. The new rules (the “Proposed Rules”), if adopted as proposed, would result in material changes to various longstanding business and legal practices in the private fund industry, and we expect significant comments and input from industry participants on certain aspects of the Proposal. The Proposed Rules do not include a grandfathering provision, and therefore existing private funds would need to modify their established terms and practices.

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