Statement from ILPA CEO Jennifer Choi on Ruling on U.S. SEC’s Private Fund Advisers Rules

Today, the U.S. Fifth Circuit Court of Appeals released its decision in National Association of Private Fund Managers vs. Securities and Exchange Commission, vacating the U.S. SEC’s Private Fund Advisers rules, including the Quarterly Statements rule.

Below, please find a statement from Institutional Limited Partners Association (ILPA) CEO Jennifer Choi.

“ILPA has viewed the Private Fund Advisers rules as effectively addressing three primary factors that pose actual and meaningful risks to private equity investors: lack of transparency, conflicts of interest, and the lack of effective internal governance mechanisms to protect the capital managed by private funds – which is provided in large part by hardworking public employees, like teachers, firefighters, and police officers.

With today’s ruling, and the absence of minimum mandated standards, private funds will be under no obligation to provide critical information related to the fees and expenses charged to fund investors and meaningful performance information, leaving LPs to negotiate for terms that should be common-sense. We are also disappointed that the Fifth Circuit did not acknowledge the SEC’s longstanding authority to protect private market investors.

ILPA’s mission as an industry advocate, convener, and standard-setter has never been more important. Our work will continue, in particular, our commitment to delivering the next evolution of quarterly reporting standards through our Quarterly Reporting Standards Initiative.”

ILPA will provide an additional update in the days ahead on changes to the approach and timeline for the Quarterly Reporting Standards Initiative based on this litigation result.

ILPA’s Effort on the SEC Private Fund Advisers Rules
ILPA Quarterly Reporting Standards Initiative

Media Contact: 
Megan Goodman
Director of Strategic Communications, ILPA
[email protected]
o: +1 202-804-6617 | m: +1 937-243-3182

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