SEC Amends Form PF to Increase Private Fund Advisor Disclosure Requirements | Arendt-Fox Schiff

Financial Advisors


On May 3, 2023, the Securities and Exchange Commission (SEC) adopted amendments to Form PF.

Form PF is a “Confidential Reporting Form for Certain SEC-Registered Investment Advisors to Private Funds” that “provides the Commission and the Financial Stability Oversight Council (FSOC) with material confidential information regarding the fundamental operations and strategies of private funds. It’s something that ‘provides’.

The Form PF amendments help the FSOC monitor systemic risk and help the SEC and FSOC assess significant changes in market dynamics among large hedge funds, private equity funds, and large private equity funds.

Do these fixes apply to you too?

Form corrections apply when:

  1. Major hedge fund advisor (in shorthedge fund advisors managing at least $1.5 billion of hedge fund assets).
  2. Private Equity Fund Advisor (in short, investment advisors managing at least $150 million in private equity fund assets).again
  3. Leading Private Equity Fund Advisor (in shorta private equity fund advisor managing at least $2 billion in private equity assets.

requirements

big hedge fund. First, the proposed amendments require, for the first time, large hedge fund advisers to eligible hedge funds to report the occurrence of a triggering event “as soon as possible, but not later than 72 hours after it occurs.” in shortthe SEC may indicate “significant stress, or may serve as a signal of potential systemic risk impact, or as a potential area of ​​investigation to mitigate investor harm.” There is an event that I think.

Examples of trigger events for large hedge funds include:

  • special investment losses,
  • large margins and default events,
  • Termination of relationship with prime broker or other material restriction;
  • Operational events and events related to withdrawals and redemptions.

private equity fund. Second, the amendment would require all private equity fund advisors to submit an event report “when one or more triggering events occur within 60 days after the end of each fiscal quarter.” is compulsory for the first time.

Examples of private equity fund trigger events are:

  • dismissal of general partners;
  • Certain fund exit events, and
  • Occurrence of advisor-driven secondary transactions.

Large Private Equity Fund. Finally, the proposed amendments introduce additional annual reporting requirements for large private equity fund advisors, including:

  • In addition to its current annual report, the leading private equity fund advisors now publish “more detailed information on the specific activities of private equity funds that are important to assessing systemic risk and protecting investors. ” is required to be reported. Clawbacks to General Partners or Limited Partners that occurred in the past year. ”
  • In addition, advisors for large private equity funds should provide additional information regarding fund strategy and the use of leverage.

Effective Date and Compliance Date

Amendments to Form PF are effective upon the compliance date. The new Sections 5 and 6 will become effective 180 days after the date the final rule is published in the Federal Register. The effective/compliance date for existing sections as amended is 365 days from the date of publication in the Federal Register. The final rule has not yet been published in the Federal Register.

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