On January 26, 2022, the US Securities and Exchange Commission (SEC or Commission) voted in favor of proposing amendments to Form PF, which is the confidential reporting form that certain SEC-registered investment advisers to private funds must file with the SEC. In the SEC’s press release regarding the proposed amendments, Chair Gary Gensler pointed to the decade of experience the SEC and Financial Stability Oversight Council (FSOC) have had analyzing the information collected on Form PF, and stated: “We have identified significant information gaps and situations where we would benefit from additional information.”
The proposed rules, which will be open for a 30-day public comment period, would (i) require large advisers to hedge funds and private equity funds to file reports within one business day of the occurrence of certain reporting events, (ii) lower the reporting threshold for large private equity advisers from $2 billion to $1.5 billion in private equity fund assets under management, and (iii) require additional information regarding large private equity funds and large liquidity funds to be reported.
This post discusses the background of Form PF, explains the amendments that have been proposed by the SEC, and identifies certain practical considerations related to the proposed amendments.
Background
The Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act) amended Section 204(b) of the Investment Advisers Act of 1940 to require certain disclosures by private fund investment advisers. The purpose of these disclosures, which became the basis for Form PF in 2011, is to assist FSOC in assessing systemic risk in the US financial system and protect investors. The requirements came about in response to the financial crisis of 2008 and the subsequent regulatory push to improve the ability of the SEC—and the federal government more broadly—to assess the health of the financial system and respond to developments that may threaten the stability of the markets and negatively impact individual investors.
