(Bloomberg) -- Private equity firms would be required to provide expansive disclosures about the fees shouldered by investors under rules set to be considered by the U.S. Securities and Exchange Commission, according to people familiar with the matter. 

The changes, which the regulator plans to propose next week, would force the companies to disclose specific expenses they pass on to clients. The rule would also address how frequently firms are required to provide the information, one person said.

SEC Chair Gary Gensler has complained that the industry’s fees are opaque and too high, meaning investors such as pension funds may not be getting the best deal. The SEC declined to comment.

New disclosure mandates could give investors more bargaining power. 

“This could provide more ammunition to investors to negotiate lower costs,” said Igor Rozenblit, a former SEC official and managing partner at Iron Road Partners, which advises private equity firms on regulatory risks.

Private equity lobbyists are already bracing for a fight, and they plan to argue that the fees are agreed to by sophisticated parties. 

It’s not the SEC’s first attempt to rein in the industry during Gensler’s brief tenure. In January, the regulator proposed rules requiring that large hedge funds and private equity firms to confidentially inform officials about big losses in close to real-time -- a significant change to the quarterly reports they file now. 

Read more: Hedge Funds Face New SEC Disclosures as Gensler Cracks Down

Pensions and endowments have poured into private equity in search of higher returns in a decade of low interest rates. Private equity funds control more than $4 trillion of assets, money that’s transforming capital markets and expanding the industry’s reach across the economy.  

Yet many investors have struggled for years to tally the full bill. In addition to charging fees and sharing in profits, private equity firms often charge portfolio companies for services, including consulting, arranging loans and other work helping them to operate. Such charges -- and whether they’re being properly split with investors -- aren’t visible to pensions and endowments if they don’t ask for them. 

In a November speech, Gensler signaled that new regulations were on the horizon. He said that he asked the SEC staff to look for ways to increase visibility into the fees firms charge and the performance metrics used by private fund managers. Gensler also said he asked officials to determine whether certain practices should be prohibited to prevent conflicts of interest.  

“It’s time we take stock of the rapid growth and changes in this field, as well as that decade of learning, and bring more sunshine and competition to the private funds space,” Gensler said. 

On Wednesday, the SEC said it planned to weigh rule changes related to private fund advisers on Feb. 9, without elaborating. If a majority of the agency’s four commissioners votes to put out the plan for public comment they would then need to hold another meeting to finalize it months later, after making changes.

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