SEC Officials Address Fair Value Rules for Private Assets
SEC's chief accountant and investment management director issue joint statement on fair value measurement and disclosure for private assets.
The Securities and Exchange Commission's chief accountant and the 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 to how investment funds value holdings that lack readily observable market prices.
Kurt Hohl, serving as Chief Accountant, and Brian Daly, Director of the Division of Investment Management, co-authored the statement, underscoring the cross-divisional significance of the guidance. The collaboration between accounting oversight and investment management regulation suggests the agency views private asset valuation as both a financial reporting and an investor protection concern.
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Private assets — including stakes in private equity funds, private credit instruments, and other illiquid holdings — present distinct valuation challenges because they do not trade on public exchanges, making fair value determinations heavily reliant on models, assumptions, and management judgment. Regulators and auditors have long flagged these determinations as an area susceptible to inconsistency or manipulation.
The statement reflects broader SEC scrutiny of the rapidly expanding private markets, where institutional and retail investors have increased their allocations in recent years. Disclosure quality around how managers arrive at net asset values has been a recurring theme in SEC examination priorities and enforcement actions.
Continue reading at Speeches and Statements for the full text of the official guidance.
