Below is an excerpt from BDO Canada’s article, originally published on March 3, 2026, offering insights into the latest regulatory developments in the sector, their potential impact, and tips to prepare. Reshared with permission. All rights reserved.
A shifting regulatory focus without direct regulation of private equity funds
Private equity (PE) in Canada continues to occupy a distinct regulatory position. Unlike public investment funds, PE vehicles are usually not subject to continuous disclosure requirements, prospectus filings, or direct supervision as regulated investment funds. While these developments have not yet translated into fundamental changes to audit or assurance requirements in Canada, they may influence how regulators think about investor protection and public interest over time. At the same time, many of the activities PE firms routinely undertake, such as capital raising, acquisitions, exits, and cross-border transactions, already bring them into contact with multiple regulators.
What is changing is not necessarily the regulatory perimeter itself, but the intensity of scrutiny around entities that are seen to have a growing public footprint or broader economic significance. Canadian standard-setters are increasingly focused on identifying entities whose financial condition may be of heightened public interest, even if those entities do not meet the traditional definition of a public interest entity (PIE), which broadly means an organization that is subject to mandatory heightened auditing requirements due to its significant public impact.
This trend mirrors developments in other jurisdictions, where regulatory oversight of PE has become more formalized over time. In the United States, changes stemming from the Dodd-Frank Wall Street Reform and Consumer Protection Act—introduced in the aftermath of the 2008 financial crisis—have expanded regulatory expectations for PE firms including registration requirements with the Securities and Exchange Commission (SEC) for many market participants. In the United Kingdom, PE firms often fall within the remit of the Financial Conduct Authority (FCA), which requires registration and ongoing reporting, including disclosures related to investment strategies, fee structures, and valuation methodologies.
Valuation practices, in particular, have become an area of increasing regulatory attention. In March 2025, the FCA published the results of a multi-firm assessment of valuation practices for private market assets, identifying areas for improvement related to governance, conflicts of interest, consistency of methodologies, and documentation. While Canadian regulators have not formally identified valuation techniques for PE-backed assets as a specific future focus, heightened scrutiny in the United Kingdom is likely to inform regulatory thinking elsewhere. As PE activity continues to expand in Canada, the robustness, governance, and assurance over valuation methodologies may increasingly be viewed as a matter of public interest.
While these regimes differ in scope and application, they reflect a broader trend toward increased transparency and oversight, even where PE funds themselves are not treated as traditional public investment vehicles. The heightened scrutiny observed in other jurisdictions may offer insight into how Canadian regulators and standard setters are thinking about public interest, transparency, and accountability as PE continues to grow in scale and economic significance.
About BDO Canada’s private equity practice
BDO’s dedicated Private Equity practice helps PE firms and their portfolio companies navigate today’s complex global business environment across the entire fund lifecycle. This practical team has a profound understanding of the private equity industry, particularly in the Canadian mid-market space. BDO professionals play an integral part in the process at every level, interacting with funds, advising on deals, and working closely with portfolio companies to help them realize their goals.
Contact:
- Braham Moondi, Partner and National Private Equity Assurance Leader, BDO Canada: [email protected]
- Jonathan Chasle, Partner and National Leader, Assurance, BDO Canada: [email protected]
