SEC Reverses Policy Limiting Retail Access to Registered Funds of Funds

August 27, 2025

Earlier in August, the Securities and Exchange Commission (SEC) staff released an Accounting and Disclosure Information (ADI) bulletin that stated, “when reviewing CE‑FOPF registration statements, the staff will no longer provide comments requesting the registrant either (i) include accredited investor status and minimum investment requirements or (ii) limit its private fund investments to 15 percent of its assets.” Historically, Closed-End Funds of Private Funds (CE-FOPF) were required to disclose in registration statements their accredited investor and minimum investment limitations or their 15% cap on private fund investments. The ADI noted that investors in these closed-end funds indirectly hold investments in private assets; however, these funds have additional regulatory protections which include

the CE-FOPF is managed by a registered investment adviser, which owes a fiduciary duty to the fund;
a board of directors, which also owes a fiduciary duty to the fund, exercises oversight of the CE-FOPF; and
the CE-FOPF makes certain periodic disclosures and bear liability for material omissions and misstatements.

The ADI highlights the importance of CE-FOPFs disclosing the type of assets they are invested in and the potential risks. Particularly the staff note, “in its strategy and risk disclosures, a CE-FOPF should provide a full discussion of the types of underlying private funds in which it proposes to invest and the associated risks and considerations, including (to the extent material) the private funds’ investment strategies, risks associated with more volatile or speculative investments, conflicts of interest, and the liquidity of the private funds’ underlying investments.”

The ADI lists next steps for funds that are already disclosing this information and encourages registrants to engage with the staff if they need further information on the implications of this change. This pivot by the SEC staff reflects Chairman Paul Atkins’ goal of increasing retail access to private markets.

Click here to read the SEC staff’s Accounting and Disclosure Information release.
Click here to read a client alert from Akin Gump.