Private Capital Markets | SEC Commissioner Takeaways
SEC Releases
Introduction
On September 4, 2025, SEC Commissioner, Mark Uyeda, opened the SIFMA Private Markets Valuation Roundtable by highlighting the vital role that Private Capital Markets play in fueling economic growth, job creation, and innovation.
He emphasized that Private and Public Markets are complementary, not competitive, thanks to their distinct advantages and regulatory flexibility in private markets versus liquidity and retail access in public markets. He stressed the importance of cultivating both to foster a well-rounded capital ecosystem.
Key Takeaways from Commissioner Uyeda
- Valuation, Disclosure, and Cost of Capital
- Private Markets are not exempt from the anti-fraud provisions under federal securities laws, truthful and accurate valuations and disclosures can directly lower the cost of capital for issuers.
- In 2025, the SEC’s Division of Examinations prioritized ensuring accuracy in opaque areas like valuation of illiquid assets, and in the calculation and allocation of Private Fund fees and expenses.
- Regulatory Framework: Fair Value Rule (Rule 2a-5)
- Closed End Funds, which may hold illiquid “level 3” assets, are required to strike fair value (NAV). Under Section 2(a)(41) and Rule 2a‑5, boards are responsible for fair valuations.
- Boards may delegate to a “valuation designee”, often the Adviser, and may further rely on Independent Valuation Firms, depending on asset complexity, cost, and materiality.
- The process must include risk-based oversight, testing, and documentation.
- Alternative Investments in 401(k) Plans
- Uyeda discussed an executive order (by President Trump, dated earlier in 2025) urging the SEC and Department of Labor to reevaluate restrictions preventing 401(k) inclusion of alternative assets like Venture Capital, Private Credit, Infrastructure, and Digital Assets.
- If managed with proper safeguards, such exposure could offer retail investors meaningful diversification and long-term growth, the appropriate exposure level should not be zero.
Vigilant’s Conclusion
Commissioner Uyeda reinforced that Private Markets are not just growth engines, they are critical contributors to a healthy, efficient financial system, but only if underpinned by sound valuation, accurate disclosures, and strong governance.
Firms that embrace these principles, with support from a firm like Vigilant, can not only satisfy regulatory expectations but also enhance investor trust and potentially reduce their cost of capital.