Jessica Forbes and Philip Heimowitz are partners and Mark Highman is special counsel at Fried, Frank, Harris, Shriver & Jacobson LLP. This post is based on a Fried Frank memorandum by Ms. Forbes, Mr. Heimowitz, Mr. Highman, and Conor Almquist.
On August 10, 2022, the Securities and Exchange Commission (“SEC”) and Commodity Futures Trading Commission (“CFTC”) proposed additional amendments (the “Proposed Amendments”) [1] to Form PF, the periodic report filed by registered investment advisers that manage private funds. [2]
The Proposed Amendments significantly expand the scope of information to be reported by private fund advisers and would, among other things, (1) require more detailed information as to hedge fund investment strategies, counterparty exposures, and investment performance, (2) include separate reporting regarding digital assets such as cryptocurrency, and (3) change how advisers report complex fund structures. The Proposing Release also seeks comment on whether to change the definition of hedge fund.
Some of the more significant aspects of the Proposed Amendments are summarized below.
I. Background
Form PF was introduced in 2011, when the SEC adopted Rule 204(b)-1 under the Investment Advisers Act of 1940 (the “Advisers Act”) requiring SEC-registered investment advisers with private fund assets under management of at least $150 million to file and periodically update Form PF. Form PF is a confidential filing required to be made on an annual basis, unless the investment adviser is a large hedge fund adviser or a large liquidity fund adviser, in which case the filing must be made quarterly. Information required to be reported on Form PF includes information regarding the adviser’s identity and assets under management, and information regarding the size, leverage, and performance of private funds managed by the adviser. Advisers with hedge fund, liquidity fund, or private equity fund assets under management exceeding certain specified thresholds are required to report additional information regarding those funds. The SEC proposed other amendments to Form PF on January 26, 2022. [3] Those proposed amendments have not yet been adopted.
