SEC Officials Address Fair Value Rules for Private Assets
SEC's chief accountant and investment management director issued guidance on fair value measurement and disclosure for private assets.
The U.S. Securities and Exchange Commission's Chief Accountant Kurt Hohl and Brian Daly, Director of the Division of Investment Management, issued a joint statement addressing fair value measurement and disclosure considerations specifically applicable to private assets, signaling heightened regulatory attention on a sector that has expanded rapidly in recent years.
The statement comes as private markets — encompassing private equity, private credit, and other illiquid asset classes — have attracted record inflows from institutional and retail investors alike. Accurate fair value measurement in these markets is widely regarded as more complex than in publicly traded securities, given the absence of readily observable market prices and the reliance on model-based or appraisal-driven valuations.
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By issuing joint guidance from both the accounting and investment management arms of the SEC, regulators appear to be underscoring a coordinated approach to oversight. Fair value disclosures are central to investor protection, allowing fund shareholders and other stakeholders to assess the true worth of holdings that may not trade on any exchange.
The involvement of the Chief Accountant signals that the statement carries weight on technical accounting standards, while Daly's participation from the Division of Investment Management suggests implications for registered funds, advisers, and other regulated entities that hold or manage private assets.
Analysts and compliance professionals are expected to parse the statement closely for any forward-looking signals about SEC examination priorities or potential rulemaking related to private asset valuation practices. Continue reading at Speeches and Statements.
