On February 9, 2022, the US Securities and Exchange Commission (the “SEC”) voted to propose a suite of new rules and amendments (the “Proposal”) under the Investment Advisers Act of 1940, as amended (the “Advisers Act”). If adopted, the Proposal would significantly increase the compliance obligations of advisers to “private funds” and would fundamentally reorder the relative rights, liabilities and bargaining leverage between advisers and their private fund investors. The Proposal creates a more prescriptive advisory relationship, which, among other changes, would prohibit common private fund practices, such as providing exculpation and indemnification for simple negligence and net-of-tax general partner clawbacks, and would reshape side-letter practices across the private funds industry.