SEC Initially Decides Not to Appeal Private Fund Rule Decision
NEWS AND ALERTS
Introduction
The SEC has appeared to have chosen to not to initially appeal against the ruling of their Private Fund Rule by the Fifth Circuit Court.
The Private Fund Rule made significant waves in the industry when it was adopted as members of the industry reported that a significant burden would likely be placed on their compliance. However, on June 5th the Private Fund Rule was overturned in Federal Court and the industry wondered if the SEC would file an appeal.
Private Fund Rule Timeline
- February 9th, 2022:
- SEC proposes Private Fund Rule.
- August 23rd, 2023:
- SEC adopts Private Fund Rule with some compliance dates as early as September 2024.
- June 5th, 2024:
- Court strikes down the Private Fund Rule.
- July 22nd, 2024:
- The deadline to request an “en banc” review of the decision.
What is Next Regarding the Private Fund Rule?
For now, the Rule remains overruled. However, there is still a possibility that the SEC will appeal to the Supreme Court.
This appeal could result in a host of outcomes including an overturning of the Fifth Court, or a proposal with a less encompassing set of rules.
While it appears the SEC is unlikely to back off its attempts to increase regulation of Private Funds, there can be some optimism for the parties critical of the Private Fund Rule. However, there is still time for a formal appeal to occur.
As always, we will continue to monitor and provide on-going support to Private Funds that want to create a successful compliance culture. Reach out to us today with any questions you may have.