September 25, 2026 (Washington, D.C.) – This month, the U.S. Securities and Exchange Commission (SEC) proposed rescinding Rule 206(4)-5 under the Investment Advisers Act, commonly known as the Pay-to-Play Rule. The proposal begins a public comment process that ILPA is following closely and plans to participate in on behalf of our members.
The rule, adopted in 2010, was intended to deter fraud and help ensure that the selection of investment advisers by government investors is based on merit rather than political contributions.
In proposing its rescission, the SEC cited market participants’ concerns about the rule’s complexity, implementation challenges, and potential unintended consequences, and suggested that existing protections under the Investment Advisers Act may be sufficient to address the conduct the rule was designed to prevent.
ILPA is reviewing the proposal and engaging with members, including public pension plans and other government investors, to assess its implications for LPs, their beneficiaries, and the broader private markets ecosystem. As part of the U.S. SEC’s public comment process, ILPA looks forward to contributing a perspective on issues affecting the strength, transparency, and long-term health of our industry.
