When the SEC proposed rules for private funds in February 2022, Commissioner Hester M. Peirce called it a “sea change” for the industry. The final version of the rules (Rules), released on August 23, 2023, walks back or eliminates some of the provisions that most concerned industry stakeholders and includes a much-needed grandfathering provision, albeit for limited provisions. Fund managers may have initially breathed a collective sigh of relief, but, upon further reflection, it is clear the Rules will still fundamentally change many aspects of hedge fund operations. Although fund managers have until September 14, 2024, or March 14, 2025 – depending on the Rule and the manager’s size – to comply, the compliance challenges the Rules pose are daunting. This second article in a two-part series discusses the compliance challenges posed by the Rules and the next steps for CCOs. The first article parsed the Rules and how they differ from the Proposal. Future articles will dive into the details of each of the Rules, as well as what measures hedge fund managers must take to comply with them. For a look at other final rules released by the SEC in 2023, see “SEC Adopts Final Rules to Address Security-Based Swaps Fraud and Undue Influence Over Certain CCOs” (Aug. 31, 2023); as well as our two-part series on the final Form PF amendments: “Enhanced Reporting for Large Hedge Fund Advisers” (Jun. 22, 2023); and “Compliance Challenges and Implications” (Jul. 6, 2023).