On August 10, 2022, the SEC and the Commodity Futures Trading Commission jointly issued proposed amendments to Form PF, a form that requires registered investment advisers to private funds to report confidentially certain information about the funds’ operations and investment strategies. An adviser is required to file Form PF if the adviser is registered with the SEC, manages one or more private funds and has at least $150 million in private fund assets under management. The amendments are designed to enhance the Financial Stability Oversight Council’s risk monitoring as well as the SEC’s and CFTC’s regulatory oversight and investor protection efforts in the private fund industry.

The proposed amendments to Form PF include the following:

• The proposed amendments would require enhanced reporting by large hedge fund advisers on qualifying hedge funds (i.e., those with a net asset value of at least $500 million). The enhanced reporting would cover investment exposure, borrowing and counterparty exposure, market factor effects, currency exposure, turnover, country and industry exposure, central clearing counterparty reporting, risk metrics, investment performance by strategy, portfolio correlation, portfolio liquidity and financing liquidity.

• Form PF requires advisers to report identifying information about themselves and the funds they manage. The proposed amendments would expand the information an adviser provides to include legal entity identifiers, assets under management, explanations of assumptions made in Form PF reporting, fund type, withdrawal and redemption rights, gross asset value and net asset value, inflows and outflows, base currency, borrowings and types of creditors, fair value hierarchy, beneficial ownership and fund performance.

• The proposed amendments would require advisers to report more detailed information on hedge fund investment strategies, counterparty exposures and trading and clearing mechanisms and would remove certain duplicative questions from Form PF.

• Form PF currently allows an adviser to report complex structures in the aggregate or separately as long as the reporting is done consistently throughout the Form. The proposed amendments would require advisers to report each component of a master-feeder arrangement and parallel fund structure separately in most situations.

• Form PF currently requires private fund advisers with at least $1.5 billion in hedge fund assets under management to report certain additional information regarding the funds they manage on an aggregate basis. The proposed amendments would remove this aggregate reporting.

Comments on the proposal are due on October 11, 2022.

The proposing release is available here, a related fact sheet is available here, and a related press release is available here.