A federal appeals court Wednesday struck down the U.S. Securities and Exchange Commission’s months-old rule regarding private fund advisers, saying the agency exceeded its statutory authority by regulating those who advise investors in private fund opportunities.

In its 3-0 decision, the U.S. Court of Appeals for the Fifth Circuit cited the SEC’s founding authority to regulate the investment community with regard to public companies. That authority, borne of the 1933 Securities Act and the 1934 Securities Exchange Act, has generally not been expanded to privately held concerns, even during the financial crisis of the early 2000s and the resulting remedial 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act, the Fifth Circuit held.