On February 9, 2022, the SEC released proposed private fund reforms (Proposal) that would force a dramatic shift in the management and operation of private funds. Unsurprisingly, individuals and members of the private funds industry submitted hundreds of comment letters during an extended comment period. To understand the potential impact of the Proposal, the Hedge Fund Law Report reviewed a targeted cross-section of the comment letters to analyze common concerns and issues they raised. This three-part series presents key takeaways from select comment letters submitted on the Proposal in anticipation of final rules and amendments by April 2023, according to the SEC’s latest “Reg Flex
” agenda. This first article summarizes general concerns raised in the comment letters about the SEC’s authority to make the proposed changes, as well as the scope, intent and impact of the Proposal. The second article will discuss three requests made by commenters; the third article will present concerns about specific requirements in the Proposal, particularly the bans on certain practices and providing preferential treatment to certain investors. See our two-part series on the Proposal: “General Observations
” (Apr. 7, 2022); and “Rule‑Specific Concerns and Next Steps
” (Apr. 14, 2022); as well as “Overview of the Proposal and the Importance of Industry Comments
” (Mar. 17, 2022).