The Securities and Exchange Commission (SEC) along with the Commodity Futures Trading Commission (CFTC) proposed joint amendments to reduce private fund reporting requirements while enabling the collection of necessary information.
Specifically, the agencies propose to amend Form PF, the confidential reporting form for certain SEC-registered investment advisers to private funds. This includes those that also are registered with the CFTC as commodity pool operators or commodity trading advisors.
Form PF collects information designed to facilitate the Financial Stability Oversight Council’s (FSOC) monitoring of systemic risk in the financial markets. The SEC and CFTC use the information collected on Form PF in their investor protection efforts.
“A key pillar of my agenda is restoring balance to disclosure obligations and reducing the cost of compliance wherever possible,” SEC Chairman Paul Atkins said. “Prior amendments to Form PF have led to overly burdensome disclosure requirements for advisers, distracting them from their core investment functions, often without a commensurate benefit to regulators’ use of the collected data. These proposed changes would help to rationalize the scope of Form PF requirements to support its purpose and bring our overall disclosure regime back into alignment.”
The proposed amendments would eliminate filing requirements for smaller advisers, who represent almost half of the advisers currently required to file Form PF,. It would do this by raising the filing threshold from $150 million in private fund assets under management to $1 billion. In addition, the proposal would also raise the exposure reporting threshold for “large” hedge fund advisers from $1.5 billion in hedge fund assets under management to $10 billion.
The agencies noted that the Form PF would continue to obtain information on over 90 percent of private fund gross assets and require detailed exposure information for funds managed by large hedge fund managers.
“By raising the filing threshold and streamlining Form PF, we are taking steps to reduce the burdens associated with filing the form,” CFTC Chairman Michael Selig said. “I look forward to reading the public comments to ensure we get these changes right so that we eliminate unnecessary costs and burdens for filers.”
Additionally, the proposed amendments to Form PF would enable a method to identify funds that are active in the private credit market. They would also eliminate or streamline many Form PF requirements, significantly reducing burdens for advisers required to file Form PF.
The agencies are accepting public comments on the proposed amendments for 60 days after the notice is published in the Federal Register.