The Securities and Exchange Commission is looking to keep private-equity firms from passing on legal costs to investors, a move aimed partly at addressing a long-standing worry among these investors that they potentially could end up having to foot the bill for an asset manager’s misdeeds.

The U.S. financial regulator’s slate of proposed new regulations for private funds last month would prohibit managers from charging investors the costs of regulatory exams, investigations, or SEC settlements and fines. READ MORE