Securities and Exchange Commission (SEC)

Rescind the following exemptions from SEC registration and oversight for private fund advisers under the Investment Advisers Act: 17 CFR § 275.203(m)-1 – Exemption for advisers solely to private funds with less than $150 million in assets under management (AUM) 17 CFR § 275.203(l)-1 – Exemption for advisers solely to venture capital funds

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Notice of Proposed Rulemaking

Private Fund Adviser Exemptions

Rescind private fund exemptions that shield hedge funds and private equity firms from disclosure, examination, and conflict of interest regulation, closing systemic risk gaps.

Securities and Exchange Commission 100 F Street NE Washington, D.C. 20549

(202) 551-5870

Exemptions under 17 CFR Part 275 were intended to allow small private investment advisers to operate with minimal oversight. However, the private fund sector has exploded in size and systemic importance, enabling market manipulation, opaque leverage, and risks to financial stability without adequate regulatory review.

Rescinding these exemptions will: • Strengthen systemic risk monitoring, • Protect public markets from opaque hedge fund-driven volatility, and • Ensure that private capital managers face the same transparency and accountability standards as other major market participants.

All investment advisers managing private funds with over $100 million in assets—regardless of fund type—shall be required to register with the SEC, comply with periodic examination, and publicly report holdings, conflicts of interest, and leverage exposure. Exemptions for “private fund advisers” and “venture capital fund advisers” will be eliminated. All substantial private capital managers will be regulated under the same standards applied to other systemically significant market participants.

Mark T Uyeda

Acting Chairman of the SEC