SEC Officials Address Fair Value Rules for Private Assets

The U.S. Securities and Exchange Commission's Chief Accountant Kurt Hohl and Brian Daly, Director of the Division of Investment Management, issued a joint statement addressing fair value measurement and disclosure considerations specifically related to private assets, signaling heightened regulatory focus on an area that has drawn increasing scrutiny as private markets have grown.

The statement reflects ongoing concerns among regulators about how investment funds and other registered entities value illiquid or hard-to-price private holdings, including private equity stakes, private credit instruments, and other assets that lack readily observable market prices. Accurate fair value measurement is critical to investor protection, as fund net asset values and performance figures depend directly on how those assets are priced.

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Disclosure practices surrounding valuation methodologies, key assumptions, and the use of third-party valuation specialists have become a central regulatory concern, particularly as retail investors gain broader exposure to private markets through interval funds, business development companies, and other registered vehicles. Regulators have indicated that transparency around valuation inputs and governance processes is essential for informed investor decision-making.

The joint nature of the statement — spanning both the accounting and investment management functions of the SEC — underscores the cross-disciplinary complexity of private asset valuation and suggests coordinated oversight attention going forward. Market participants, fund managers, and their auditors are expected to carefully review the guidance to assess compliance with existing standards and anticipate potential examination priorities.

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