Former SEC Chairman Arthur Levitt Criticizes SEC's Proposal on Retail Access to Private Markets

PANews reported on October 16, citing Bloomberg, that former U.S. SEC Chairman Arthur Levitt Jr. published an article criticizing the SEC's recently released proposal to retailize private markets. Under the proposal, managers of private equity, venture capital and other funds would find it easier to attract retail investors' capital, and could establish multiple share classes in closed-end funds without prior regulatory approval. Levitt pointed out that the proposal does not require managers to adjust or standardize fee, liquidity, transparency, governance and valuation arrangements, and retail investors could be assigned to high-fee share classes. He suggested that the SEC require third-party valuation of assets used to calculate performance fees, and require funds to use charts in offering documents to show the impact of fees on investment returns.