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SEC Adopts Amendments to Form PF to Enhance Private Fund Reporting
Practical Law Legal Update w-042-2944 (Approx. 4 pages)
SEC Adopts Amendments to Form PF to Enhance Private Fund Reporting
by Practical Law Corporate & Securities
| Published on 09 Feb 2024 • USA (National/Federal) |
The SEC and CFTC adopted joint final rules to amend Form PF to enhance private fund reporting and the SEC's oversight of private fund advisers.
Update: On March 12, 2024, the joint final rule was published in the Federal Register. The rule amendments will become effective March 12, 2025.
On February 8, 2024, the SEC, jointly with the CFTC, adopted amendments to Form PF to enhance private fund reporting. 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.
Among other things, the adopted amendments will:
- Require advisers to report additional:
- basic information about themselves, their related persons, and their private fund assets under management; and
- identifying information about the private funds they manage and basic information about the funds' assets, financing, investor concentration, and performance.
- Require hedge fund advisers to report more detailed information about the fund's:
- 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 amendments will become effective 365 days after publication in the Federal Register.
The enhanced private fund reporting obligations also follow additional Form PF amendments adopted in May 2023 to require current event reporting by large hedge fund advisers and quarterly event reporting by all private equity fund advisers. Those amendments became effective on December 11, 2023 (see Legal Update, New Form PF Event Reporting Requirements to Become Effective in December).
For more information on the regulatory obligations of investment advisers, including Form PF filing requirements, see Practice Note, Investment Adviser Regulation: Overview.