SEC Proposes Amendments to Form PF to Enhance Private Fund Reporting | Practical Law

SEC Proposes Amendments to Form PF to Enhance Private Fund Reporting | Practical Law

The SEC proposed amendments to Form PF to enhance private fund reporting and the SEC's oversight of private fund advisers. The CFTC is concurrently considering to propose the amendments jointly with the SEC.

SEC Proposes Amendments to Form PF to Enhance Private Fund Reporting

Practical Law Legal Update w-036-5700 (Approx. 4 pages)

SEC Proposes Amendments to Form PF to Enhance Private Fund Reporting

by Practical Law Corporate & Securities
Published on 11 Aug 2022 • USA (National/Federal)
The SEC proposed amendments to Form PF to enhance private fund reporting and the SEC's oversight of private fund advisers. The CFTC is concurrently considering to propose the amendments jointly with the SEC.
Update: The SEC and CFTC's joint proposed rule was published in the Federal Register on September 1, 2022. Comments are due on or before October 11, 2022.
On August 10, 2022, the SEC voted to propose amendments to Form PF to enhance private fund reporting. The CFTC is concurrently considering to propose the amendments jointly with the SEC. The amendments are intended to improve the Financial Stability Oversight Council's (FSOC) ability to monitor and assess systemic risks and enhance the SEC's oversight of registered investment advisers that advise private funds and hedge funds.
The SEC believes the proposed amendments would provide greater insight into the structure and operations of private funds and hedge funds and improve data quality and comparability. Among other things, the proposed changes would:
  • Require advisers to report additional basic information about themselves and their private funds.
  • Require advisers to report more detailed information about hedge fund:
    • investment strategies, including more granular strategy categories and descriptions, with new categories such as real estate and digital assets to reflect strategies more commonly pursued by hedge funds since Form PF was adopted;
    • counterparty exposures; and
    • trading and clearing mechanisms.
  • Eliminate the aggregate reporting requirement for large hedge fund advisers in Section 2a of Form PF.
  • Enhance reporting by large hedge fund advisers for qualifying hedge funds (funds with a net asset value of at least $500 million), including:
    • expanding and simplifying investment exposure reporting;
    • revising open and large position reporting;
    • revising borrowing and counterparty exposure reporting;
    • revising market factor effects reporting; and
    • making certain other changes to enhance the value of data collected on qualifying hedge funds.
  • Require fund advisers to report separately each component fund in complex fund structures, such as master-feeder arrangements and parallel fund structures.
  • Modify how advisers report private fund investments in other private funds, trading vehicles, and other funds that are not private funds.
The public comment period for the proposed amendments will close 30 days after publication in the Federal Register or on October 11, 2022, whichever is later.
For more information on the regulatory obligations of investment advisers, including Form PF filing requirements, see Practice Note, Investment Adviser Regulation: Overview. For up-to-date information on the status of significant SEC rulemaking, see Practice Note, SEC Rulemaking Tracker.