Notwithstanding the array of rules that fund managers must operate under pursuant to the Investment Advisers Act of 1940 (Advisers Act) and other regulations, many of the norms and mores in the private funds industry have been established via negotiations between investors and fund managers. The SEC recently proposed new and amended rules for private fund advisers under the Advisers Act, however, that would prescribe new requirements and upend established practices (e.g., barring certain established practices even if fully and properly disclosed). Notably, some of the proposed changes are so sweeping that even investors are raising concerns about their appropriateness. Morgan Lewis addressed the SEC’s spate of proposed industry reforms in a recent webinar featuring partners Courtney C. Nowell, Christine M. Lombardo, Joseph D. Zargari and Jedd H. Wider. This second article in a two-part series denotes potential problems raised by the proposed Advisers Act reforms that prohibit certain activities and types of preferential treatment of investors, in addition to creating expansive new quarterly reporting requirements. The first article outlined Advisers Act amendments related to audit requirements and annual compliance reviews, as well as key features of the SEC’s proposed changes to Form PF. For additional insights from Morgan Lewis partners, see our two-part series on a panel at the Morgan Lewis Private Fund Investors Roundtable: “Strong Hedge Fund Performance and Innovative Structures” (Jan. 20, 2022); and “Tax Issues, China, Trade and Sanctions” (Jan. 27, 2022).