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

Form PF is the “confidential reporting form for certain SEC-registered investment advisors to private funds” that “provides the Commission and the Financial Stability Oversight Council (FSOC) with important, confidential information about the basic operations and strategies of private funds.”

The amendments to Form PF will help the FSOC monitor systemic risk and the SEC and FSOC evaluate material changes in market trends among large hedge funds, private equity funds, and large private equity funds.

Do these amendments apply to you?

The form amendments apply to you if you are:

1. A large hedge fund advisor (i.e., a hedge fund advisor with at least $1.5 billion in hedge fund assets under management);
2. A private equity fund advisor (i.e., an investment advisor with at least $150 million in private equity fund assets under management); or
3. A large private equity fund advisor (i.e., a private equity fund advisor with at least $2 billion in private equity assets under management.

Requirements

Large hedge funds. First, the amendments require, for the first time, that large hedge fund advisors to qualifying hedge funds “report as soon as practicable upon, but no later than 72 hours after” the occurrence of trigger events — i.e., events that the SEC believes “may indicate significant stress or otherwise serve as signals of potential systemic risk implications or as potential areas of inquiry so as to mitigate investor harm.”

Examples of trigger events for large hedge funds include:

• Extraordinary investment losses,
• Significant margin and default events,
• Terminations or other material restrictions of prime broker relationships,
• Operations events and events associated with withdrawals and redemptions.

Private equity funds. Second, the amendments require, for the first time, that all private equity fund advisors file an event report “upon the occurrence of one or more trigger events within 60 days of each fiscal quarter end.”

Examples of trigger events for private equity funds include:

• The removal of a general partner,
• Certain fund termination events, and
• The occurrence of an advisor-led secondary transaction.

Large private equity funds. Finally, the amendments introduce additional annual reporting requirements for large private equity fund advisors, including:

• In addition to their current annual reporting, large private equity fund advisors are now required to report “more detailed information regarding certain activities of private equity funds that are important to the assessment of systemic risk and for the protection of investors,” like information relating “to any general partner or limited partner clawback that occurred during the past year.”
• Additionally, large private equity fund advisors must give additional information regarding fund strategies and the use of leverage.

Effective and Compliance Dates

The amendments to Form PF will become effective contemporaneously with the compliance dates. New sections 5 and 6 will become effective 180 days after the date of publication of the final rule in the Federal Register. For the amended existing sections, the effective/compliance date is 365 days after the date of publication in the Federal Register. The final rule has not yet been published in the Federal Register.