SEC makes biggest overhaul of $20T private equity, hedge fund industry in years

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The new rules require private funds to issue quarterly fee and performance reports and disclose certain fee structures while barring giving some investors preferential treatment over redemptions an…

The Securities and Exchange Commission on Wednesday voted to overhaul rules for private equity and hedge funds, but in a victory for the industry did not make it easier for investors to sue fund managers and also did not ban arrangements that make it easier for some investors to cash out than others.

The new rules require private funds to issue quarterly fee and performance reports and disclose certain fee structures while barring giving some investors preferential treatment over redemptions and portfolio exposure. The rules also require funds to perform annual audits. SEC Chair Gary Gensler said ahead of the panel’s voting that the changes will benefit investors in these funds, typically wealthy individuals and institutional investors such as pension funds and companies raising capital from them.

Advocacy groups have accused the private fund industry of unfair, conflicted and opaque practices that hurt everyday Americans who invest in such funds through their pensions.

 

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US SEC votes on overhaul for $20T private fund industryThe SEC's five-member panel will vote on the changes, proposed last year, aimed at increasing transparency, fairness and accountability in the $20.4 trillion private funds industry.
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