The latest SEC proposals are numerous, but also interlinked, simplifying how to edit fund disclosures across investor-facing materials.
TL;DR: review language used for fee presentations.
Recently, the SEC has started fielding comments on changed definitions to accredited investors, which has added implications for who could be charged performance fees by SEC-registered advisors.
This could see amendments to the Advisors Act Rule 205-3, where compensation such as carried interest could be charged to a new range of clients, including accredited investors and registered investment funds.
Today’s definition of a “qualified client” carries its own net work and AuM thresholds that are separate from the accredited investor tests (used under Regulation D). But the proposal would essentially ensure one test governs both who can invest in a fund and be charged a performance fee.
Helpfully, a summary by Kirkland and Ellis also unpacks some notable safeguards:
- Registered funds that pay performance compensation would need board approval and specific disclosures.
- Qualified client status would still be tested whenever a client enters a contract or invests in the fund.
- The proposal would apply to prospective arrangements, where existing ones would generally be left alone.
So, what does this mean for fund marketers?
This potentially harmonises requirements for private fund advisors and, in a practical sense, simplifies things! It is easier to describe one eligibility test instead of two, reducing errors or contradictions between onboarding documents.
As always, it is best for marketer to get ahead if definitions change: flag and review any pitch books, DDQs, fact sheets or website content that cites qualified performance fee-paying investors or thresholds.
Any new fee structure will also need to be conveyed consistently in presentations according to the Marketing Rule, where compliance team coordination is required to make appropriate changes to how fees appear in track-record material.
Likewise if you run or distribute registered products, board approval and disclosure requirements mean there will be governance components to investor communications.
Greater fee-eligible investors could be competitive fund managers clamp down and market to them aggressively. This invites firms to position their messaging based on access, or on strategy and results, to adhere to ever-varying audiences.
Sources
Kirkland & Ellis, Kirkland AIM, October 2026
SEC, Release No. 33-11449
