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Kelley Howes spoke to Buyouts about the U.S. Securities and
Exchange Commission’s (SEC) new private fund rules, which have
been described as the most sweeping new regulations for private
funds since the passage of the Dodd-Frank Act – even after
the SEC significantly mitigated much of its original proposals.
According to Kelley, fund managers will need to devote much more
money and time for the new compliance requirements.
“These things cost money,” Kelley said. “It’s
going to increase the number of staff members involved in
compliance. It’s going to need more integration of custodial
and administrative systems. A lot of smaller shops don’t have
these systems, and that increases risks since you’re relying on
humans using an Excel spreadsheet.”
Ultimately, the increased compliance costs will be paid for by
LPs [limited partners], the constituency the SEC looks to protect
through its new rules, Kelley added. “It all comes back to the
questions if this is worth it, because everyone’s expenses just
went up.”
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provided herein may not be applicable in all situations and should
not be acted upon without specific legal advice based on particular
situations.
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