SEC’s Private Fund Rules Are Seismic for the United States But Have Limited Impact on Asia

Singapore-based Morrison Foerster Funds Partner Jason Nelms was quoted in a recent article, “SEC’s Private Fund Rules are Seismic for the U.S. But Have Limited Impact on Asia,” published by DealStreetAsia.

The article explores the latest U.S. Securities and Exchange Commission (the “SEC”) rules and amendments—which address the opacity of the U.S. private capital market—and its impact on private equity and hedge funds in Asia.

Jason explains that Asia-based fund managers raising U.S. capital are likely to comply with the new rules in areas such as performance and fee and expense disclosures.

He says, “Southeast Asia-based managers provide investors with quarterly reports and annual audited reports, but the new reporting requirements compel levels of detail and standardization around performance and fee/expense disclosure far in excess of the current market standard.”

Jason expects compliance costs and administrative burdens in the region to increase in order to address both legal risks and evolving market practice.

He adds that as market-standard compliance practices develop in the coming months, including the clarity around the extent to which Southeast Asia-based managers adjust their practices, he expects these concerns to ease and to see continued momentum toward broad fundraising in the United States.

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