Bill Easing PE Firms’Disclosure Gets House Approval

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By Rob Tricchinelli

Sept. 9 — The House passed a bill Sept. 9 that would reduce private equity firms’ registration and disclosure requirements.

H.R. 5424 would lessen restrictions on advertising and exempt private equity funds from publishing certain details about the assets in their portfolios, currently required by the SEC’s Form PF.

It passed 261-145, with a few dozen Democrats in support and three Republicans in opposition. It was sponsored by Rep. Robert Hurt (R-Va.).

Veto Threat

The Dodd-Frank Act requires private equity funds with more than $150 million under management to register with the Securities and Exchange Commission. With Senate hurdles and White House opposition, Republican efforts to undo that requirement have fallen short.

The White House has threatened to veto the Hurt bill, as with other Dodd-Frank rollbacks.

“The exemptions that this bill provides would enable private fund advisers to slip back into the shadows,” the administration said in a policy statement.

The measure comes as the SEC has stepped up enforcement against private equity firms, with a number of recent cases dealing with fee-shifting, broken-deal expenses and other cost disclosures to clients. Notable enforcement targets have included Apollo Global Management LLC, Blackstone Group LP and KKR & Co.

Custody Rule Preserved

The bill was amended before the full vote to preserve audit requirements facing private equity firms.

An earlier version of the bill would have stripped out the custody rule, in which firms are required to have yearly audits to confirm that the contents of their portfolio match what they tell investors that they own.

The Council of Institutional Investors was among the groups opposing the bill. In a letter to lawmakers, the CII said the legislation would “roll back transparency and reporting requirements that we and many of our members believe are critical to investor protection.”

The U.S. Chamber of Commerce supported the bill.

While it is unlikely to become law as a standalone measure, H.R. 5424 could be tacked on to a year-end spending measure as Congress faces its responsibility to fund the government.

To contact the reporter on this story: Rob Tricchinelli in Washington at

To contact the editor responsible for this story: Phyllis Diamond at

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