Law firm partners and their fund clients breathed a sigh of relief when the Securities and Exchange Commission passed new rules this week for private equity firms and hedge funds that appeared watered down from original proposals.

“They didn’t blow up the world, but it is impactful,” Marc Elovitz, co-managing partner of Schulte Roth + Zabel and co-chair of the firm’s investment management and regulatory and compliance group, said in an interview. “It is going to be a significant change in private funds regulations.”