April 24, 2022
1) Quarterly Statements: Distribution of statements within 45-days after each calendar quarter-end - It would be difficult for some RIAs (small to mid-sized firms with less than 30 employees) that internally prepare quarterly statements for multiple funds/fund investors to prepare and distribute such statements within the proposed time period. If such proposed period were the rule, then small to mid-sized RIA firms may have to outsource statement accounting. This would increase fund costs and reduce investor returns. We believe the prescribed time period should be extended to 75-120 days.
2) IRR and income performance presentation - We believe it would be best to have a set formula on how to calculate performance. Thus, all funds would use the same metrics, which would assist investors in comparing cost and performance information across other fund investments.
3) Consolidated Reporting for Certain Fund Structures - The AICPA Audit and Accounting Guide for Investment Companies sets forth rules for presentation, and it recommends a non-operating model as preferable. We believe the proposed standardized requirements should be in sync with GAAP Accounting and the AICPA.
4) Preferential Treatment: Side Letters - We believe that a grandfather provision should be added to the proposed rules, in order to avoid possible breach by advisers of side letter arrangements in place prior to the final release of the proposed rules.