Skip to main content

What We Do

Hidden fee papers

April 26, 2022

SEC Proposal on Private Fund Advisers Will Give Investors More Insight Into Opaque Fees, Expenses, and Fund Performance

Better Markets filed a comment letter in response to the proposal of the Securities and Exchange Commission (“SEC”) to expand disclosures by private fund advisers on fees, expenses, and fund performance and to ban certain practices that harm investors.

Why It Matters. According to SEC data, there are currently more than 5,000 private fund advisers with more than $18 trillion in assets under management. One common misconception is that private markets and private funds are only of concern to “well-heeled investors.” This ignores that everyday Americans are, in fact, exposed to private funds in a number of ways, most notably through pension plans and mutual funds. Despite their importance to retirement savers and the capital markets more broadly, too many private fund advisers employ opaque fee and expense structures and fund performance metrics to increase their own compensation at the expense of their investors. Evidenced by the dozens of enforcement actions and SEC settlements with private fund advisers over the past decade, this shadowy and often predatory marketplace is ripe for sorely needed transparency and fairness.

What We Said. The SEC Proposal would implement a variety of essential improvements in the regulation of the private funds markets, making this increasingly important financial sector substantially more fair and transparent. First, the Proposal would enhance investor protection and transparency by requiring more complete and standardized disclosure of fees, expenses, and fund performance. Second, it would restrict or prohibit certain sales practices, conflicts of interest, and compensation schemes that are contrary to the public interest and investor protection. Third, it would prohibit preferential treatment of some investors by private fund advisers with respect to redemptions and disclosures, and condition other forms of preferential treatment on disclosure of that preferential treatment to existing and prospective investors. Fourth, it would strengthen the accounting regime applicable to private funds by requiring annual financial statement audits of all advised funds. Finally, it would require private fund advisers to maintain books and records to facilitate the Commission’s examination efforts and to promote a culture of compliance at private funds.

Bottom Line. Better Markets supports the SEC’s proposed rule to expand regulation of private fund advisers to rein in the long list of unfair, predatory, and opaque practices that have become standard practice in the world of private markets.

Read our full Comment Letter here or click the button below.

Comment Letters

Donate Today!

Contact Us

For media inquiries, please contact or 202-618-6433.

To sign up for our email newsletter, please visit this page.

This field is for validation purposes and should be left unchanged.

Sign Up — Stay Informed With Our Monthly Newsletter

"* (Required)" indicates required fields

This field is for validation purposes and should be left unchanged.

For media inquiries,

please contact or 202-618-6433.


Help us fight for the public interest in our financial markets, protecting Main Street from Wall Street and avoiding another costly financial collapse and economic crisis, by making a donation today.

Donate Today