SEC Officials Address Fair Value Rules for Private Assets

Two senior Securities and Exchange Commission officials have issued a joint statement addressing fair value measurement and disclosure considerations for private assets, signaling heightened regulatory attention to how investment funds value holdings that lack readily observable market prices.

Kurt Hohl, the SEC's Chief Accountant, and Brian Daly, Director of the Division of Investment Management, co-authored the statement — an arrangement that underscores the cross-divisional importance the agency places on consistent and transparent valuation practices across the investment management industry.

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Private assets, which include stakes in private equity, private credit, real estate, and other illiquid instruments, have grown substantially as a share of institutional and retail fund portfolios in recent years. Because these holdings do not trade on public exchanges, determining their fair value requires significant judgment, creating potential risks for investors if methodologies are inconsistent or inadequately disclosed.

The joint statement from the SEC's accounting and investment management leadership suggests regulators are focused on ensuring that funds apply rigorous, well-documented approaches to valuation and provide investors with sufficient transparency to assess the reliability of reported figures. Such guidance from staff-level officials typically signals areas where the agency may scrutinize filings or pursue future rulemaking.

Continue reading at Speeches and Statements.