The SEC has been increasingly critical of provisions purporting to limit an adviser’s liability – known as hedge clauses – and their potential to mislead investors, particularly in a retail context. In fact, the Commission attempted to ban hedge clauses in the proposed version of the private fund adviser rules, although that provision was excluded from the final version of the since-vacated rules. Fund managers have long thought the Commission’s concerns were adequately addressed by including disclaimers alongside hedge clauses that compliance with state and/or federal securities laws are not waivable, known as savings clauses. A recent settlement order (Order) makes it clear, however, that the SEC believes improperly drafted savings clauses are no less misleading to investors. The Private Equity Law Report interviewed several industry experts to understand some of the SEC’s concerns about the use of hedge clauses; the limits of savings clauses and ways they can be bolstered; possible implications of the Order going forward; and steps advisers may want to consider taking in light of the SEC’s focus on the issue. This article summarizes key parts of the Order and provides additional insights from those experts. For coverage of other recent SEC enforcement activity, see “Actions Highlight Advisers’ Responsibility to Accurately and Honestly Communicate With Investors” (Apr. 4, 2024); and “Action Targets Non-Violative Use of MNPI Through Policy and Procedure Failures” (Mar. 7, 2024).