United States of America: Re-opened consultation on SEC proposed rulemaking on Safeguarding Advisory Client Assets in connection with the private fund adviser audit rule

On 3 September 2023, the US Securities and Exchange Commission (SEC) re-opened the consultation for the proposed rule on Safeguarding Advisory Client Assets until 30 October 2023. The SEC re-opened the consultation due to the adoption of a new rule to protect investors that invest in private funds, specifically the private fund adviser audit rule, which in some areas overlaps with the rule on safeguarding advisory client assets. The proposed changes in the rule include the expansion of the audit provision’s availability from “pooled investment vehicle” clients to “any other entity”. Additionally, the changed rule requires non-US companies to adhere to the same substantial standards as in the US GAAP for their audited financial statements, as well as enhanced notification requirements to the SEC.