Preparing for Change: SEC’s Proposed Cybersecurity Rules for Private Fund Advisers

Regulatory Compliance
October 5, 2023

In February 2022, the U.S. Securities and Exchange Commission (SEC) unveiled a set of proposed cybersecurity regulations aimed at bolstering the preparedness of registered investment advisers (“advisers”) and funds in the face of growing cybersecurity threats and incidents.


The SEC's primary objective with these new guidelines is to safeguard investors and ensure the stability of financial markets by enhancing the availability of cybersecurity-related information and streamlining SEC inspection and enforcement processes. While these regulations are currently in the proposal stage, there are proactive steps fund advisers can take to proactively establish a robust framework.


Understanding the Proposed Rules

The SEC's proposed regulations, which fall under the Investment Advisers Act of 1940 and the Investment Company Act of 1940, mandate that, if adopted, private fund advisers and funds implement comprehensive policies and procedures designed to mitigate cybersecurity risks. The key provisions of these proposed regulations include:


Preparing for the New Rules

While there are no immediate actions required, fund advisers can initiate preparations in anticipation of the potential adoption of these rules.

Looking Ahead

The SEC is likely to implement a cybersecurity rule with the aim of safeguarding investors and market stability in the near future. Fund advisers can utilize the time they have now to engage in early dialogues with key stakeholders and formulate an action plan to stay ahead of regulatory developments.

How Petra can help

Petra FundsGroup’s compliance team has decades of experience managing SEC regulatory compliance programs for private fund advisers. The group’s expertise enables them to provide insight and guidance on a wide range of regulatory compliance services, from investment adviser registration to ongoing compliance support to performing SEC mock examinations. Learn more about Petra’s comprehensive compliance offering here.

Please get in touch with a member of Petra's compliance team with any questions you have about the SEC’s proposed cybersecurity rule or other regulatory compliance matters.






contact us