SEC Private Fund Adviser Rules Vacated by Fifth Circuit.

The U.S. Court of Appeals for the Fifth Circuit has vacated the private fund adviser rules adopted by the U.S. Securities and Exchange Commission (SEC) in August 2023. The court ruled that the SEC exceeded its authority in adopting these rules, as they were unauthorized and had untenable legal bases. The rules, which were set to have a compliance date in September 2024, included restrictions on activities, quarterly statements, preferential treatment, private fund audits, adviser-led secondaries, and recordkeeping. It is uncertain whether the SEC will appeal the ruling, but for now, private fund advisers are unlikely to need to follow these rules. However, the SEC may still raise similar requirements in future examinations, and investors may seek certain terms that would have been granted under the disputed rules. [Extracted from the article]