Former SEC Chairman Arthur Levitt Criticizes Retail Access Proposal for Private Markets

Former SEC Chairman Arthur Levitt Jr. criticized the SEC's proposal for retailization rules in the private market. The proposal allows fund managers of private equity, venture capital, and other funds to more easily attract retail investments and to establish multiple classes of shares in closed-end funds without regulatory approval. Levitt pointed out that the proposal does not require managers to adjust fees, liquidity, transparency, governance, or valuation arrangements, which could result in retail investors being allocated to high-fee share classes. He suggested that the SEC require third parties to value assets used for performance fee calculations and that funds present the impact of fees on investment returns using charts in their offering documents.

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