Earlier today, a coalition of private fund industry organizations filed a petition in federal court seeking judicial review of the “Private Fund Adviser” rule. This rule was adopted by the Securities and Exchange Commission on August 23, 2023 by a split (3-2) majority vote and will effect a number of changes to the private funds industry.

The petition asserts that the new rulemakings “exceed the Commission’s statutory authority, were adopted without compliance with notice-and-comment requirements, and are otherwise arbitrary, capricious, an abuse of discretion, and contrary to law, all in violation of the Administrative Procedure Act … and of the Commission’s heightened obligation to consider its rules’ effects on “efficiency, competition, and capital formation[.]”

It goes without saying that private equity, hedge, and other private fund managers will be paying close attention to this matter, but it is worth noting that this petition, in and of itself, does not have any tolling effect on the rule itself.