The Securities and Exchange Commission (SEC) proposed amendments to the reporting form for private fund investment advisors.
The proposed amendments to Form PF are designed to enhance the Financial Stability Oversight Council’s (FSOC) ability to assess systemic risk. They are also designed to protect investors and bolster the commission’s regulatory oversight of private fund advisers.
“Since the adoption of Form PF in 2011, a lot has changed,” SEC Chair Gary Gensler said. “The private fund industry has grown in size to $11 trillion and evolved in terms of business practices, complexity of fund structures, and investment strategies and exposures. The Commission and Financial Stability Oversight Council now have almost a decade of experience analyzing the information collected on Form PF. We have identified significant information gaps and situations where we would benefit from additional information.”
Specifically, the proposed amendments would require current reporting for large hedge fund advisers and advisers to private equity funds. They would be required to file reports within one business day of events that indicate significant stress at a fund that could harm investors or signal risk in the broader financial system. This provides the SEC and FSOC with more timely information to analyze and assess risks to investors and the markets more broadly.
In addition, it would decrease the reporting threshold for large private equity advisers from $2 billion to $1.5 billion in private equity fund assets under management. Finally, the proposal would require more information on large private equity funds and large liquidity funds to enhance the information used for risk assessment.
The public comment period will remain open for 30 days after publication in the Federal Register.