A federal appeals court has dashed U.S. Securities and Exchange Commission rules requiring hedge funds and private equity firms to detail quarterly fees and expenses to investors.
The U.S. 5th Court of Appeals in New Orleans, consisting of a three-judge panel, sided with industry groups who argued that the SEC exceeded its authority and that the rules were unnecessary for “highly sophisticated” investors who invest in private funds, according to Bloomberg.
“The Commission has exceeded its statutory authority in adopting the Final Rule,” Judge Kurt D. Engelhardt wrote in a 27-page court document on Wednesday obtained by Benzinga.
The regulations were one of several rules that the SEC has been seeking to impose on hedge funds and private equity firms, Bloomberg reported.
“The staff will take a look” and respond accordingly, SEC Chair Gary Gensler said during an industry conference Wednesday in New York when asked about the court opinion. The SEC rules, which were …