The Private Equity Growth Capital Council (PEGCC) today filed an extensive (18 page) commentary on the proposed rule calling on the Securities and Exchange Commission (SEC) to modify the proposed rules as they apply to private equity and growth capital funds.
The PEGCC has requested that the SEC consider the following in drafting its final rule:
- Private equity structures, contrary to encouraging excessive risk taking, are in fact the model to emulate as they tie compensation to performance and require co-investment with their investors.
- The structure of compensation and earnings opportunities in place at private equity firms, derived from the nature of the private equity firm business model itself, already provides all the protection against the inappropriate risk-taking and compensation abuses that Section 956 of the Dodd-Frank Act strives to prevent.
- PEGCC comments offered a series of suggested modifications to the rule to address a range of issues, including treatment of bonuses, carried interest and ways to measure the size of a private equity firm.
Established in 2007 and formerly known as the Private Equity Council, the PEGCC is based in Washington, D.C. The members of the PEGCC are 35 of the world‘s leading private equity and growth capital firms united by their commitment to growing and strengthening the businesses in which they invest.