US private fund industry bodies sue SEC over new disclosure rules

'No choice but to litigate'

A coalition of six US trade bodies representing hedge funds and private markets firms have filed a suit against the Securities and Exchange Commission, alleging its new rules around disclosure are unlawful and harmful for the industry.

The lawsuit, filed on 1 September, argues that the new disclosure rules, which also prohibit groups from providing investors with preferential treatment, will "hamper the jobs, innovation, and other benefits private funds bring to the economy". Passing in a 3-2 vote in August, the rules require groups to provide investors with quarterly statements detailing certain information regarding fund fees, expenses, and performance. Furthermore, private fund advisers must obtain and distribute to investors an annual financial statement audit of each private fund they advise, as well as a fairn...