SEC Proposes Expanding Performance-Based Fee Eligibility for Advisers

The SEC proposed amendments to the Investment Advisers Act exemption to allow registered investment advisers to charge performance-based compensation to a broader set of clients, including registered management investment companies and business development companies. The change would relax current restrictions, potentially increasing fee flexibility for advisers and altering fund fee structures. The proposal is subject to public comment and final adoption, with market impact contingent on the final rule.