SEC Officials Address Fair Value Rules for Private Assets
SEC accounting and investment management leaders issued guidance on fair value measurement and disclosure for private assets.
Senior Securities and Exchange Commission officials have issued a statement focusing on fair value measurement and disclosure considerations specifically applicable to private assets, signaling continued regulatory attention to how fund managers value illiquid holdings.
Kurt Hohl, Chief Accountant, and Brian Daly, Director of the Division of Investment Management, jointly released the statement, underscoring the cross-divisional significance of accurate valuation practices in private markets. The collaboration between the accounting and investment management arms of the SEC suggests a coordinated push to strengthen oversight in this area.
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Private assets — including private equity, private credit, and other illiquid instruments — have grown substantially as a share of institutional and retail investment portfolios in recent years, making consistent and transparent valuation methodologies an increasingly urgent regulatory concern.
Fair value measurement standards require funds to estimate what a market participant would pay for an asset in an orderly transaction, a process that carries inherent subjectivity when observable market prices are absent. Disclosure requirements are intended to give investors sufficient information to assess the assumptions and judgments underlying those estimates.
The statement from Hohl and Daly reflects the SEC's broader effort to ensure that disclosures accompanying private asset valuations keep pace with the complexity and scale of private markets exposure across the investment management industry. Continue reading at Speeches and Statements.
