Oct. 29, 2023
Relative Comments: The SEC should reconsider reopening the comment period given the need for timely implementation of private fund adviser reforms. Additional delays in finalizing private fund audit requirements hurts transparency for investors in this opaque market. Reopening the process introduces further uncertainty into an already complex rulemaking process. Substantive Comments: The proposed expansion of the audit provision stretches the SEC's authority and reduces freedom for private agreements between advisers and clients. Requiring reconciliation with U.S. GAAP imposes domestic standards on international firms and exceeds SEC jurisdiction. The agreement requirement between auditors and advisers/entities infringes on private contractual relationships. The SEC fails to justify the need for modifying audit provisions given new baseline private fund audit requirements. Existing private fund audit rule adequately protects investors without changes to custody rule audit provision. Analysis overstates benefits and underestimates costs of proposing further modifications to the audit framework. Transition period is needed before applying changes to audit provision to firms newly subject to private fund audit requirements. The SEC should limit amendments to audit provision to issues directly related to private fund audit requirements. Sent with Proton Mail secure email.