SEC Officials Address Fair Value Rules for Private Assets

Senior Securities and Exchange Commission officials have issued a statement addressing fair value measurement and disclosure considerations specifically tied to private assets, signaling heightened regulatory attention on how investment funds value holdings that do not trade on public markets.

The statement was issued jointly by Kurt Hohl, the SEC's Chief Accountant, and Brian Daly, Director of the Division of Investment Management — two of the agency's most senior figures overseeing financial reporting and fund oversight. The pairing of accounting and investment management leadership underscores the cross-divisional nature of the concerns being raised.

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Private assets, including stakes in private equity funds, private credit instruments, and other illiquid holdings, have grown substantially as a share of institutional and retail investment portfolios in recent years. Unlike publicly traded securities, these instruments lack observable market prices, making consistent and transparent valuation a persistent challenge for both managers and regulators.

Fair value accounting standards require that assets be measured at the price that would be received to sell an asset in an orderly transaction between market participants. When market prices are unavailable, managers must rely on models and assumptions, areas that regulators have long scrutinized for potential inconsistency or lack of transparency in disclosures to investors.

The statement reflects the SEC's broader push to ensure that disclosures around private asset valuation are rigorous, consistent, and investor-protective as allocations to alternative investments continue to grow across fund types. Continue reading at Speeches and Statements.