Published on Aug 11th, 2022 |

Brief Introduction

On August 10th, the SEC proposed amendments to Form PF which would enhance private fund reporting. Specifically, these amendments would strengthen the SEC’s investor protection capabilities and their oversight of private fund advisers, while also enhancing the Financial Stability Oversight Council’s (FSOC) ability to assess systemic risk.

Who Applies for the Proposed Amendments?

The proposed amendments call for more detailed reporting amongst a variety of areas for:

  • Large Hedge Fund Advisers;
  • Advisers of Private Funds; and
  • Hedge Funds themselves.

7 Key Impacts of the Proposed Changes

The SEC envisions that the proposed reporting rules would result in the following below.

  1. More comprehensive Form PF with superior data quality and fewer reporting errors, that will assist with the identification of trends.
  2. Provide deeper insight into the operations and strategies of the aforementioned parties.
  3. Enhance reporting on basic information about Advisers and the Private Funds they advise.
  4. Enhance reporting by large Hedge Fund Advisers on qualifying Hedge Funds.
  5. Enhance reporting concerning Hedge Funds.
  6. Remove aggregate reporting for large Hedge Fund Advisers.
  7. Amend how Advisers report complex structures.

SEC Reason for Proposal

In support of the proposal, SEC Chair, Gary Gensler, cited how the private fund industry has grown by ~150% in gross asset value in the past decade and that the business practices, complexities, and investment strategies in the industry have all respectively evolved.

Considering these drastic changes, Mr. Gensler believes that the proposed amendments would improve the quality of information received from Form PF, which would result in superior investor protection and the continued maintenance of fair, orderly, and efficient markets.

Vigilant’s Final Conclusion

Evidently, the SEC seeks to improve their surveillance of private funds and investor protection overall. It is important to ensure that your firm properly handles regulatory filings and remains prepared for an SEC Exam. 

If you are looking for assistance with regulatory filings or any general compliance issues, contact us.

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