CFA filed a comment letter with the Securities and Exchange Commission (SEC) that would promote transparency and accountability and reduce harmful conflicts of interest in the private funds market. Among other things, the proposal would require private fund advisers to provide private fund investors with quarterly statements that include information regarding fees, expenses, and performance for any private fund that they advise, obtain an annual audit of the financial statements of the private funds they manage, obtain a fairness opinion from an independent opinion provider in connection with adviser-led secondary transactions, and prohibit private fund advisers from engaging in certain sales practices, conflicts of interest, and compensation schemes that are contrary to the public interest and the protection of investors.

In particular, the letter commended the SEC for its boldness in seeking to root out harmful advisory conflicts of interest that are contrary to the public interest and the protection of investors, and encouraged the SEC to use its Dodd-Frank Section 913(g) authority more broadly, especially with regard to sales practices, conflicts of interest, and compensation schemes that harm retail investors.