The United States Securities and Exchange Commission's Chief Accountant and its Director of the Division of Investment Management issued a joint staff statement on 28 September 2026 warning registrants that the spread of private credit into funds accessible to ordinary investors demands far greater rigour in how those assets are valued and disclosed.
The statement, titled Statement on Fair Value Measurement and Disclosure Considerations for Private Assets, was issued by Kurt Hohl, Chief Accountant, and Brian Daly, Director of the Division of Investment Management. It sets out the staff's expectations under Topic 820 of the Financial Accounting Standards Board's codification and Rule 2a-5 of the Investment Company Act of 1940.
The staff put a number on the shift that prompted it. "Specifically, private credit investment within registered fund portfolios has grown nearly 60%, from $170 billion in December 2020 to $270 billion in December 2025," the statement says, citing the Commission's own Investment Management data.
The opening framing is unambiguous. "The growing accessibility of private assets, including private credit, calls for a critical reminder that registrants maintain rigor over how these assets are valued and how those valuations and asset risk characteristics are disclosed to investors," the two officials wrote.
What the staff is asking for is closer to market based thinking than to model based thinking. Preparers should consider "the broader market environment, including prevailing credit spreads, liquidity conditions, and the compensation a market participant would demand for bearing the risks associated with the investment," the statement says, provided those considerations match the assumptions a market participant would use. Books valued largely off discounted cash flows at origination spreads are the most exposed to that test. The likely consequence is a round of valuation policy refreshes, wider use of third party valuation agents, and greater dispersion between funds holding exposure to the same borrower.
The pairing of the two authors is itself the signal. A statement from the Chief Accountant alone reaches auditors and chief financial officers. Adding the Division of Investment Management aims it at fund boards, which under Rule 2a-5 carry the statutory duty for fair value determination, and converts what many boards treat as a delegated process into a documented one that examination staff can test. The statement's references to Public Company Accounting Oversight Board standards point to harder audit challenge and longer audit cycles, which raises the running cost of a semi liquid private credit vehicle and favours the largest managers.
The growth figure explains the timing. Private credit inside registered funds rising from 170 billion dollars to 270 billion dollars in five years means the risk has migrated from institutional limited partners, who negotiate their own diligence, to investors buying a daily or quarterly net asset value. A stale or optimistic net asset value in a semi liquid fund is not only a disclosure problem, it transfers value between redeeming and remaining holders. That is the investor protection point the staff is pressing, and it is also why the statement bothered to cite secondary market volumes at all: a functioning secondaries market is the nearest thing the asset class has to independent price discovery.
The statement names its scope as registered closed end funds, interval funds, tender offer funds, business development companies and private funds. "Robust policies and procedures, paired with material disclosure, help investors understand an entity's fair value process, the judgments involved, and the risks associated with private assets," the staff concluded.
