SEC Exempts CLOs and Securitized Assets from Final Private Funds Rule

On August 23, the Securities and Exchange Commission (SEC) adopted a final Private Fund Advisers Rule that will significantly increase the compliance obligations of private fund managers in the form of quarterly financial statements to investors, annual audits, and restrictions on certain activities, among other provisions. In line with SFA’s advocacy (see SFA’s initial comment letter in April, 2022, and follow-up letter in June, 2022), the Commission has exempted securitized assets, including collateralized loan obligations (CLOs), from the final rule. SFA commends the Commission for its decision and for recognizing the unique features that make CLOs characteristically different from other private funds that were intended to be the focus of the rule.

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