SEC Adopts New Rules with Significant Impact for Private Fund Advisers

On August 23, 2023, the Securities and Exchange Commission (“SEC”) adopted a sweeping set of new rules and rule amendments (each, a “New Rule” and together, the “New Rules”) applicable to investment advisers (“Advisers”) under the Investment Advisers Act of 1940, as amended (the “Advisers Act”).¹ The New Rules are focused on private fund Advisers, and they are designed for two primary purposes. First, they enhance private fund Advisers’ transparency regarding preferential terms granted to selected investors. Second, they mandate disclosure regarding certain fees, expenses and conflicts of interest related to private fund Advisers’ operations and restrict certain practices that the SEC deems contrary to the public interest. Although less burdensome than the rules proposed last February, the New Rules represent a significant increase in the SEC’s regulation of private funds and private fund Advisers that will necessarily change the way Advisers operate and interact with fund investors.

On September 1, 2023, a group of six private equity and hedge fund industry groups filed a petition in federal court seeking judicial review of the New Rules. The industry groups asserted that the SEC overstepped its legal authority by adopting the New Rules. We are discussing this development further in the alert.

Set forth below is a summary of the New Rules highlighting key changes and their practical implications for private funds, private fund Advisers and private fund investors.

A. Rules Applicable to All Private Fund Advisers

The following New Rules impose requirements that apply to all private fund Advisers, whether registered with the SEC or not, and including exempt reporting advisers (“ERAs”) and, with some exceptions, SEC-registered offshore Advisers that advise private funds.² As detailed below, the New Rules applicable to all private fund Advisers restrict certain activities and impose prohibitions and disclosure requirements related to the preferential treatment of investors.

Restricted Activities Rule

Under the New Rules, all private fund Advisers will be prohibited from engaging in certain activities with respect to the private funds they advise (each such private fund, a “Fund” and collectively, the “Funds”) or, in some cases, will only be permitted to engage in such activities upon disclosure to or receipt of consent from investors in the Funds.

Restrictions on charging certain regulatory, compliance, examination and investigation fees and expenses.

Private fund Advisers will be prohibited from charging or allocating to a Fund:

• any regulatory, compliance or examination fees or expenses of the Adviser or its related persons, unless the Adviser distributes written notice of such fees or expenses, including the dollar amount thereof, to the investors in such Fund within 45 days after the end of the fiscal quarter in which the charge occurs; 
• any fees or expenses incurred in connection with an investigation of the Adviser or its related persons by any governmental or regulatory authority, even if the conduct at issue would otherwise have been indemnifiable under the Fund’s governing documents, unless the Adviser receives written consent to charge or allocate such fees or expenses to the Fund from at least a majority in interest of the Fund’s investors that are not related persons of the Adviser; and
• any fees or expenses associated with an investigation of the Adviser pursuant to which a court or governmental authority imposes a sanction for an Advisers Act violation. In the event the Adviser charges such fees and expenses to a Fund with the requisite investor consent prior to an imposition of any sanction (see the immediately preceding bullet point), it will need to reimburse the Fund for such fees and expenses.

As a matter of investor relations, many Advisers already disclose to investors regulatory, compliance and examination expenses charged to a Fund. In addition, the operating agreements of Funds often exclude any regulatory expenses that relate solely to an Adviser from the Fund expenses chargeable to investors. Further, if a regulatory authority were to impose a sanction on an Adviser that resulted from such Adviser’s non-indemnifiable conduct, pursuant to the relevant Fund’s operating agreement, such Adviser would be required to reimburse such Fund for any expenses charged in connection with the sanction. Thus, we do not believe this New Rule will have a significant impact on current industry practice, except with respect to the requirement for majority investor consent to charge investigation-related fees or expenses to a Fund.

Restrictions on non-pro rata expense allocations.

Private fund Advisers will be prohibited from charging or allocating on a non-pro rata basis any fees or expenses related to a current or potential portfolio investment when multiple Funds and other clients advised by the Adviser (or its related persons) have invested (or propose to invest) in such portfolio investment, unless (i) the charge or allocation approach is fair and equitable under the circumstances and (ii) the Adviser distributes prior written notice to the Fund investors regarding the non-pro rata charge or allocation and describes how its approach is fair and equitable under the circumstances.

The SEC has clarified that whether a non-pro rata charge or allocation is fair and equitable is a facts-and-circumstances inquiry for any given expense. For example, a non-pro rata allocation may be appropriate when (i) an expense relates to a specific type of security held only by one of the Funds, (ii) an expense relates to a bespoke structuring arrangement for one of the Funds to participate in the portfolio investment, or (iii) one of the Funds may receive a greater benefit from the expense relative to other Funds, such as the potential benefit of certain insurance policies.

Fund investors often negotiate in Fund agreements or side letters restrictions on, or transparency rights with respect to, non-pro rata allocations. However, it is not current market practice to distribute prior written notice of such non-pro rata allocations or detailed descriptions of the particular circumstances dictating such non-pro rata allocations. While we do not believe this particular New Rule significantly changes industry practice on how such allocations are made (other than by eliminating the need for investors to negotiate such provisions on a case-by-case basis), Advisers will need to pay attention to the timing of notice and required disclosure. This may be particularly relevant in the co-investment context where non-pro rata allocations are more common and timing issues may be meaningful.

Restrictions on reducing carry clawbacks by taxes applicable to Advisers.

Private fund Advisers will be prohibited from reducing the amount of their carry clawback by the amount of actual, potential or hypothetical taxes applicable to an Adviser, its related persons or their respective beneficial owners, unless the Adviser distributes written notice of the pre- and post-tax reduction clawback amounts to Fund investors within 45 days after the end of the fiscal quarter in which the clawback occurs.

We do not expect that this restriction will have a significant impact on Advisers in the near term. It is possible, however, that the mandatory disclosure to investors of pre-tax and post-tax clawback amounts will cause this point to be more heavily negotiated as it pertains to new Fund investments, which in turn may result in more investor-friendly clawback reductions.

Restrictions on borrowing from private funds.

Private fund Advisers will be prohibited from borrowing assets or receiving a loan or extension of credit from a Fund, unless the Adviser provides to each investor in such Fund a written description of the material terms of such credit facility and receives written consent from at least a majority in interest of the Fund investors that are not related persons of the Adviser.

A private fund Adviser borrowing from a Fund, while rare, always presents a conflict of interest, and as such, Advisers frequently seek to obtain consent either from Fund investors or, more typically, from a Fund’s investors advisory committee. This New Rule seemingly eliminates the option of seeking consent from just the investors advisory committee. It remains to be seen whether investors may contractually delegate their right of consent to the investors advisory committee (as is the industry practice with many other investor consents currently required by the Advisers Act).

Recordkeeping requirements for the restrictive activities rule.

The New Rules require registered private fund Advisers to keep copies of all notifications, consents and other documentation distributed or received in accordance with the restricted activities rule (including dates and addressees for distribution of such documentation).

Please refer to our Restricted Activities Rule Summary for an at-a-glance summary of the restricted activities rule.

Preferential Treatment Rule

The New Rules impose significant restrictions with respect to preferential treatment of Fund investors and investors in a similar pool of assets.

Prohibitions on redemption and information preferential rights.

The New Rules include prohibitions on the granting of preferential rights related to redemption and information. Specifically, private fund Advisers are prohibited from providing such preferential terms to selected investors if the terms are reasonably expected to have a material, negative effect on other Fund investors or investors in a similar pool of assets. Accordingly, a private fund Adviser may not:

• grant preferential redemption rights to investors in a Fund or similar pool of assets that the Adviser would reasonably expect to have a material, negative effect on other investors in that Fund or a similar pool of assets, unless (i) the redemption is required by applicable law, rule, regulation or order of governmental authority or (ii) the Adviser has offered the same redemption right to all existing investors and will continue to do so for future investors in the Fund and any similar pool of assets; or
• provide investors in a Fund with information regarding portfolio holdings or exposures of the Fund or any similar pool of assets that the Adviser would reasonably expect to have a material, negative effect on other investors in that Fund or a similar pool of assets, unless such information is offered to all existing investors in the Fund and any similar pool of assets at the same time or substantially the same time.³

Except (i) as required by applicable law or regulation and (ii) for liquid funds, with respect to different classes of interests within the same Fund, preferential redemption rights are rarely granted to Fund investors. Thus, for illiquid funds, such as closed-end private equity or venture capital funds, a prohibition on preferential redemption rights is in line with current industry practice. There are, however, certain investors that may request such preferential redemption rights as a result of written internal policy requirements and, while Advisers resist this type of agreement for many reasons, the New Rules would eliminate the ability to accommodate such requests.⁴  However, liquid funds, such as open-end hedge funds, frequently have various classes of interests with different redemption terms (in addition to different management and performance fees) attached to each class. While the SEC acknowledged that under certain circumstances, having classes of interests with different redemption terms is acceptable, it also specifically stated that it will examine whether the terms attached to each class do not unfairly discriminate against certain types of investors and therefore indirectly violate the preferential treatment rule.

In addition, the prohibition on selectively granting information rights regarding portfolio investments may materially affect industry practice with respect to co-investments and could disproportionately affect emerging private fund Advisers that often rely on their ability to grant informational rights to attract seed investors. Subject to various non-compete provisions under relevant Fund agreements, seed investors often use such information to gain insight into Advisers’ due diligence processes and to shape their own investment strategies. We do not anticipate that private fund Advisers will be willing to grant meaningful information rights related to their investment strategy to all investors (except for the information required by the quarterly statement rule). Thus, the New Rules may eliminate an important fundraising incentive for certain Advisers. It also remains to be seen how this prohibition will affect private fund Advisers’ ability to offer selective co-investment rights, as such rights necessarily involve the provision of information only to Fund investors who are offered such co-investment opportunities (the SEC has specifically stated that the preferential treatment rule applies to co-investment vehicles).

Required disclosure of preferential rights.

The New Rules also require certain disclosures in connection with the granting of preferential rights. Private fund Advisers must provide all prospective Fund investors with advanced written notice of any preferential treatment granted by the Adviser or its related persons to other investors in the Fund, if such preferential treatment is related to “material economic terms” (such as cost of investing, liquidity rights, fee breaks, and co-investment rights). Importantly, this written notice must be delivered to each prospective investor before its investment in the Fund.

Further, private fund Advisers must provide all current Fund investors with written notice of any preferential treatment granted by the Adviser or its related persons to other investors in the Fund, regardless of the type of preferential treatment and regardless of whether such preferential rights are material or not material. For liquid funds, this must be done as soon as reasonably practicable after the investor’s investment in the Fund, and for illiquid funds, this must be done as soon as reasonably practicable after the end of the Fund’s fundraising period.

Additionally, the New Rules require private fund Advisers to provide, at least annually, a written notice with specific information covering preferential treatment provided by the Adviser or its related persons to other investors in the same Fund in the time since the prior written notice was provided (if any).

The notice called for by the New Rules must be specific. For example, it may take the form of redacted side letter copies or summarized preferential treatment terms. The SEC has noted in connection with fee terms that merely disclosing that other investors are paying lower fees would not be sufficiently specific to satisfy an Adviser’s obligations under the New Rules.

These restrictions around preferential rights pose one of the more significant changes to industry practice of all the New Rules. Instead of delivering side letter compendiums during the post-closing Most Favored Nation (MFN) process, as is typically done today, Advisers will likely need to make the side letter provisions (containing material economic terms) available to prospective Fund investors prior to closing in order to comply with the New Rules. The SEC release is unclear whether an advance written notice requirement applies to the material economic terms granted to other investors participating in the same closing. We assume it does not, since all preferential terms granted to such investors would only be effective as of the relevant closing date. There may be circumstances where a closing date is delayed or in fact does not occur for certain investors and thus any preferential terms offered to such investors would never actually be granted.

Recordkeeping requirements for the preferential treatment rule.

Pursuant to the New Rules, registered private fund Advisers must retain written communications received and sent in connection with all notices required pursuant to the preferential treatment rule (including dates and addressees for distribution of such notices).

Please refer to our Preferential Treatment Rule Summary for an at-a-glance summary of the preferential treatment rule.

B. Rules Applicable to All Registered Private Fund Advisers

There is a category of the New Rules that is applicable to SEC-registered private fund Advisers. Thus, private fund Advisers registered or required to be registered with the SEC are covered, while ERAs and registered advisers that do not advise private funds or only advise non-U.S. private funds are not. These New Rules require registered private fund Advisers to deliver to investors quarterly statements, an annual audit and, in connection with adviser-led secondary transactions, a fairness or valuation opinion, as further described below.

Quarterly Statement Rule

The New Rules require registered private fund Advisers to provide to investors, for every Fund that has at least two full fiscal quarters of operating results, quarterly statements that include disclosures regarding (i) certain Fund-level and portfolio company-level fees, expenses and compensation and (ii) Fund performance. These enhanced quarterly statements must be provided to investors (a) with respect to non-funds of funds, within 45 days of the end of each of the first three fiscal quarters and within 90 days of the end of each fiscal year and (b) with respect to funds of funds, within 75 days of the end of each of the first three fiscal quarters and within 120 days of the end of each fiscal year. Please refer to our Quarterly Statement Rule Summary for further details about the type of information required to be disclosed.

The New Rules require registered private fund Advisers to maintain copies of quarterly statements and to record distributions of such quarterly statements (including dates and addressees for such distribution with respect to each investor). Registered private fund Advisers must also maintain (i) records evidencing the calculation method for all expenses, payments, allocations, rebates, offsets, waivers and performance listed on any such statements and (ii) documentation substantiating the Adviser’s determination that a Fund is liquid or illiquid (generally speaking, if a Fund allows voluntary redemptions/withdrawals, it is a liquid fund; otherwise, it is an illiquid Fund).

The SEC believes that this more robust and standardized reporting will allow investors to better monitor each Fund’s performance and each registered private fund Adviser’s fees and expenses, both at the Fund and the portfolio-company level. The Advisers’ concern, however, is that such detailed disclosure will not only increase the administrative expenses of each Fund, but may possibly give third parties an insight into each Adviser’s investment strategy. This, in turn, could jeopardize an Adviser’s competitive advantage when sourcing and structuring portfolio investments and thus negatively affect a Fund’s performance.

Private Fund Audit Rule

The New Rules also require registered private fund Advisers to obtain and distribute to investors annual audits of each Fund. These audits must be conducted according to the same standards as are applied to annual private fund audits under Rule 206(4)-2 under the Advisers Act (the “Custody Rule”). As a result of this requirement, the Advisers that are currently relying on the “surprise examination” alternative to an annual audit in order to comply with the Custody Rule will now need to obtain an annual audit. The New Rules also require registered private fund Advisers to maintain for each Fund copies of audited financials and to record distributions of such financials (including dates and addressees for such distributions with respect to each investor).

The New Rules acknowledge that some registered private fund Advisers may not have requisite control over a Fund client to cause it to be audited (for example, where a sub-adviser is unaffiliated with the Fund). In this circumstance, such Advisers must, if the Fund does not otherwise undergo such an audit, (i) take all reasonable steps to cause their Fund clients to be audited in satisfaction of the New Rules and (ii) maintain records documenting such reasonable steps.

While most Advisers audit their Funds annually, some have determined that the “surprise examination” is a more cost-efficient option for certain Funds. That option will no longer be available which may lead to a significant increase in such Funds’ expenses.

Adviser-Led Secondaries Rule

Under the New Rules, to complete an adviser-led secondary transaction, a registered private fund Adviser must obtain and distribute to investors a fairness opinion or valuation opinion from an independent opinion provider, as well as prepare and distribute to investors a written summary of material business relationships such Adviser has, or has had within the past two years, with the provider of the opinion. For purposes of the New Rules, an adviser-led secondary transaction is a transaction initiated by an Adviser or its related persons that offers Fund investors the choice between (i) selling all or a portion of their interests in the Fund and (ii) converting or exchanging all or a portion of their interests for interests in another vehicle advised by the Adviser or its related persons. The SEC has clarified that this definition is not intended to encompass tender offers, and that the rule is not intended to apply to cross trades. The opinion and summary of material business relationships must be provided to investors before the election form in respect of the secondary transaction is due. Additionally, the New Rules also require registered private fund Advisers to retain copies of any fairness or valuation opinions and summaries of material business relationships and to record distributions of such opinions and summaries (including dates and addressees for such distribution with respect to each investor).

Adviser-led secondary transactions present a number of inherent conflicts of interest for Advisers. Many Advisers have been obtaining fairness (and, less often, valuation) opinions for themselves to essentially “cleanse” the conflicts of interest and avoid any possible challenges to such transactions from the Fund investors. Such opinions would typically include a non-reliance provision that would prevent any third parties (other than the Adviser that requested such opinion) from relying on the opinion. However, the New Rules not only require that the opinions are obtained by registered private fund Advisers, but also that such opinions are distributed to Fund investors. This will likely require Advisers to negotiate non-reliance and confidentiality provisions with the opinion providers and may substantially increase the cost of such opinions given the possibility of increased liability exposure for the opinion providers.

C. Rules Applicable to All Registered Advisers

Although the New Rules are substantially focused on private fund Advisers, certain of the New Rules, which are focused on compliance recordkeeping, apply more broadly to all SEC-registered Advisers—whether they advise private funds or not.

Compliance Rule Amendment

The amendment to Rule 206(4)-7 of the Advisers Act (the “Compliance Rule”) will require all registered Advisers to document their annual compliance review in writing. This amendment applies to all registered Advisers, including those that do not advise Funds (such as, for example, Advisers that manage only separately managed accounts).

Registered Advisers will be required to prepare an annual written review that evaluates their compliance policies and procedures and the effectiveness of their implementation. In the SEC’s opinion, this will assist SEC staff in assessing fulfillment of the Compliance Rule’s annual review requirement. It will also enable Advisers to evaluate any compliance issues that occurred within the year and make any appropriate changes to the compliance policies.

We do not believe that this presents a material change to existing industry practice. It has been our experience that most Advisers, and particularly most registered Advisers, already document in writing annual reviews (and any other periodic reviews) of their compliance programs.

Books and Records Rule Amendment

The amendment to Rule 204-2 under the Advisers Act (the “Books and Records Rule”) will require registered Advisers to maintain books and records related to the New Rules—namely, the quarterly statement rule, private fund audit rule, adviser-led secondaries rule, preferential treatment rule and restricted activities rule.⁵  The key requirements of the Books and Records Rule amendment pertaining to each New Rule are discussed in the sections focusing on such New Rule. Additionally, the Books and Records Rule already requires all registered Advisers to maintain any records documenting their annual review required by the Compliance Rule.

Advisers should note that this amendment has no legacy (grandfathering) status and thus may result in an imminent and significant administrative burden on Advisers (see “Compliance Dates” below).

D. Effectiveness and Compliance Dates

The New Rules become effective 60 days after the date of publication in the Federal Register, but they have different compliance dates. The compliance dates for the New Rules vary among the specific rules and among Advisers with less than $1.5 billion in private fund assets under management (“AUM”) (“smaller private fund Advisers”) and those with $1.5 billion or more in private fund AUM (“larger private fund Advisers”). In each case, the AUM is calculated as of the last day of the Adviser’s most recently completed fiscal year. The compliance timelines are triggered by the date of publication in the Federal Register. The table below summarizes the applicable compliance dates.

E. Legacy Status

“Legacy status” (or grandfathering) will apply to certain aspects of the restricted activities rule and the preferential treatment rule. The legacy status:

• applies only to existing Funds and Funds that will commence operations prior to the applicable compliance date (see the Compliance Timeline Summary above which is also available here); and 
• is granted only with respect to the prohibitions on preferential redemption and information rights and the restricted activities of (i) borrowing from a Fund without consent and (ii) charging a Fund for fees and expenses related to certain investigations without consent.

As a result of this legacy status, Advisers will not be required to re-negotiate their current agreements or any agreements entered into prior to the relevant compliance dates as they pertain to the above-listed prohibitions and restricted activities.

F. Industry Response to the New Rules

On September 1, 2023, just over a week after the New Rules were adopted, a coalition of six private equity and hedge fund trade groups⁷ sued the SEC in connection with the New Rules. The petition can be found here.

The petitioners assert that the SEC has exceeded its statutory authority and violated agency rulemaking requirements. The petition states that the New Rules were “adopted without compliance with notice-and-comment requirements, are otherwise arbitrary, capricious, an abuse of discretion, and contrary to law,” and that the SEC has failed to consider the New Rules’ effects on the promotion of “efficiency, competition, and capital formation.”⁸

The petitioners allege that the New Rules will fundamentally alter the regulation of Funds and unnecessarily prohibit longstanding, widely-used business practices, including an opportunity for investors and Advisers to negotiate bespoke contractual terms that benefit both parties. Most Fund investors are highly sophisticated and capable of doing their own due diligence on Funds and Advisers. Investors seek to invest in Funds because such investments produce attractive gains not only for Advisers, but also for investors. The petitioners assert that the New Rules’ prohibitions and burdensome requirements will stifle entrepreneurialism and flexibility which, in turn, will diminish investment returns for investors.

In addition, the petitioners assert that the New Rules diverge significantly from the rules that were proposed in February 2022. Therefore, the SEC was required to notify the public of these significant changes and allow the public to comment on them before adopting them. The SEC thus failed in this regard.

The SEC has disputed these assertions and stated that it will defend the New Rules in court.⁹

Despite this challenge, which will likely take time to be resolved, we recommend that Advisers work with counsel now to prepare for compliance with the New Rules.

Conclusion

While some of the New Rules are consistent with, or course-correct, the existing industry practice to make it more investor-friendly, there remain open questions regarding the interpretation of certain aspects of the New Rules. Currently, the preferential treatment rule appears to be the most controversial. It represents a significant departure from the industry practice, and it will materially impact negotiations of Fund terms with Fund investors for all Advisers (possibly deterring certain investors from investing in Funds).

Some of the unintended consequences of the preferential treatment rule for investors and Advisers may include: (i) lower returns on Fund investments for certain large investors, including pension funds, since Advisers may be more reluctant to grant lower fees to such investors (even in return for large capital commitments) if such lower fees are visible to all investors and (ii) a stifling effect on fundraising by Advisers, particularly emerging Advisers that rely on side deals with large investors to seed their Funds.

In addition, the recordkeeping associated with compliance with the New Rules will increase the administrative burden on Advisers and will require Advisers to commit additional resources to aid such compliance. Such increased compliance costs will be (i) allocated to a Fund (to the extent permitted by applicable law and regulations), thus increasing such Fund’s administrative expenses, or (ii) borne by each Adviser, which may result in an Adviser charging higher fees to offset any additional compliance burden. This, in turn, may lower investment returns for investors.

The implementation of the New Rules will require a significant overhaul of each Adviser’s compliance program. Thus, Advisers are encouraged to review their current compliance policies and procedures to determine what steps must be taken to timely implement changes imposed by the New Rules to satisfy their obligations thereunder. This is particularly important because once the New Rules are in effect, we would expect the SEC to focus its examinations on New Rules compliance.

We will continue to monitor additional SEC guidance and any developments in industry practice in response to the New Rules. We are available to assist our clients in interpreting and implementing the New Rules.

¹ The SEC release regarding the New Rules can be found here.

² The Advisers Act defines a “private fund” as an issuer that would be an investment company as defined in section 3 of the Investment Company Act of 1940, as amended, but for section 3(c)(1) or 3(c)(7) of that Act. For purposes of the New Rules, securitized asset funds are generally excluded from the term “private fund.”

³ This prohibition appears to apply only to preferential information rights granted to investors in a Fund, leaving Advisers free to grant such preferential information rights to investors in “similar pools of assets” such as co-investment vehicles. However, it is not clear that the SEC intended to limit this prohibition in such manner, given that elsewhere in the release the SEC refers to “any investor” (rather than just investors in a Fund) when discussing this prohibition. We expect this issue to be clarified by the SEC in the coming weeks.

⁴ The SEC specifically stated in its release that investors’ internal policy requirements do not warrant an exemption from the preferential treatment rule.

⁵ Although the Books and Records Rule applies only to Advisers that are registered or required to be registered, all Advisers (including ERAs and foreign Advisers) should retain written evidence of their compliance with the New Rules (to the extent such New Rules are applicable to them).

⁶ The SEC release does not provide the compliance date for the amendments to the Books and Records Rule. However, since the SEC stated that the amendments to the Books and Records Rule are being adopted to facilitate compliance with the New Rules, we are assuming that the recordkeeping requirements related to each New Rule will be triggered by the compliance date of such New Rule.

⁷ The petitioners are National Association of Private Fund Managers, Alternative Investment Management Association Ltd., American Investment Council, Loan Syndications and Trading Association, Managed Funds Association and National Venture Capital Association.

⁸ Pet. for Review at 2, Nat'l Assoc. of Private Fund Mgrs. v. SEC, No. 23-6071 (5th Cir. Sept. 1, 2023), ECF No. 1.

⁹ Paul Kiernan, Equity, Hedge Funds Sue SEC Over Rules, WALL ST. J., Sept. 2-3, 2023, at B11.

This memorandum is a summary for general information and discussion only and may be considered an advertisement for certain purposes. It is not a full analysis of the matters presented, may not be relied upon as legal advice, and does not purport to represent the views of our clients or the Firm. Alicja Biskupska-Haas, an O’Melveny partner licensed to practice law in New York, Tracie Ingrasin, an O’Melveny partner licensed to practice law in New York, and Michele W. Layne, an O’Melveny of counsel licensed to practice law in California, contributed to the content of this newsletter. The views expressed in this newsletter are the views of the authors except as otherwise noted.

© 2023 O’Melveny & Myers LLP. All Rights Reserved. Portions of this communication may contain attorney advertising. Prior results do not guarantee a similar outcome. Please direct all inquiries regarding New York’s Rules of Professional Conduct to O’Melveny & Myers LLP, Times Square Tower, 7 Times Square, New York, NY, 10036, T: +1 212 326 2000.