Former SEC Chairman Arthur Levitt criticizes SEC's proposal to allow retail access to private markets
BIBIBI
AT A GLANCE
Former SEC Chairman Arthur Levitt criticized the proposal to allow retail access to private markets, expressing concern about insufficient protection regarding fees, valuation, and disclosures.
Article
Former SEC Chairman Arthur Levitt criticizes SEC's proposal to allow retail access to private markets
PANews October 16 reported, citing Bloomberg, that former U.S.SEC Chairman Arthur Levitt Jr. published an article criticizing SEC the recently released proposal for rules to retailize private markets. Under the proposal, managers of private equity, venture capital and other funds would find it easier to raise retail capital and could establish multiple classes of shares in closed-end funds without prior regulatory approval. Levitt pointed out that the proposal does not require managers to adjust or standardize fee, liquidity, transparency, governance, or valuation arrangements, and retail investors could be allocated to higher-fee share classes. He recommended that SEC third parties be required to value assets used to calculate performance fees, and that funds be required to use charts in offering documents to show the impact of fees on investment returns.
PANews stated that Bloomberg reported on former U.S.SEC Chairman Arthur Levitt Jr.'s criticism of the SEC proposal for rules to retailize private markets.
02
The proposal would make it easier for managers of private equity, venture capital and other funds to raise retail capital and would allow multiple classes of shares to be established in closed-end funds without prior regulatory approval.
03
Arthur Levitt pointed out that the proposal does not require managers to adjust or standardize fee, liquidity, transparency, governance, or valuation arrangements.
04
Arthur Levitt believes that retail investors could be allocated to higher-fee share classes.
05
Arthur Levitt recommended that third parties value assets used to calculate performance fees and that charts be used in offering documents to show the impact of fees on investment returns.
AI-assisted interpretation
The following is analysis, separate from reported facts. Verify important claims independently.
The proposal concerns making it easier for retail investors to participate in certain private-market products. Arthur Levitt is concerned that fees and other key arrangements may not be consistent across share classes, causing retail investors to bear higher costs or face insufficient information.
Why it matters to readers
If the proposal advances, how retail investors participate in private markets and the arrangements for fund fees, valuation, and return disclosures could be affected.
Private funds typically involve complex terms relating to fees, liquidity, and valuation. When reviewing such products, investors should pay attention to the fee rate of the share class they are purchasing, exit restrictions, valuation methods, and risk disclosures.
Risks and unknowns
Evidence not provided SEC The original proposal document or a link to Arthur Levitt's original article was not provided; the reported content requires independent verification.
Evidence does not specify SEC whether the proposal will advance, be amended, or be withdrawn.
The evidence does not specify whether the final rules will adopt third-party valuation, fee charts, or other recommendations.
Related Developments
Loading event timeline…
Related concepts
Private equity
This term is not in the glossary yet. Browse related concepts in the glossary.
