SEC Amends Form PF to Expand Disclosure Disclosures on Hedge Funds and Private Equity Funds

The U.S. Securities and Exchange Commission (SEC) voted 3 to 2 on May 3, 2023 to pass amendments to Form PF that will affect reporting requirements for certain SEC-registered investment advisers in the private fund industry (the Form PF amendments) and, in particular, will require timely reporting of certain trigger events by major hedge fund advisers and all private equity fund advisers.

The SEC approved the Form PF amendments despite dissent from Commissioners Hester Peirce and Mark Uyeda. Commissioner Peirce indicated that she did not share the SEC’s belief in the “benevolent power of more”, while Commissioner Uyeda expressed concern about the additional adviser costs likely to be borne by investors. However, Chairman Gary Gensler stated that he sees the Form PF amendments as an improvement in visibility in the private fund industry, which has evolved significantly since the time Form PF was first passed.

Overview of change form PF

The various Form PF amendments and their required reporting deadlines apply to (1) large hedge fund advisers, (2) private equity fund advisers and (3) large private equity fund advisers.

The Form PF Amendments require (1) current reporting as soon as possible and in any event within 72 hours for large hedge fund advisers of certain trigger events related to their qualifying hedge funds; (2) event reporting for all private equity fund advisors on a quarterly basis of certain triggering events at the fund and advisor level; and (3) certain enhanced and additional reporting for all major private equity fund advisers, including reporting of any chargeback events.

The Form PF Changes will become effective six months after publication of the adopted press release in the federal register for current and quarterly event reporting and one year after publication in the federal register for the rest of the amendments.

The Form PF Amendments largely reproduce the contents of the SEC’s proposal issued on January 26, 2022 regarding the current reporting (the proposal). Certain material changes from the proposal include (1) the adoption of an extended time frame for current reporting of “as soon as possible” and no later than 72 hours after occurrence for large hedge fund advisers, and quarterly reporting for private equity fund advisers ( compared to the one business day time frame of the Proposal); (2) not require unencumbered cash reporting as originally proposed; and (3) including the proposed reporting of chargeback events in a major private equity fund adviser’s annual filing (compared to the proposal’s current reporting for all private equity fund advisers).

In a departure from the Proposal, the Form PF amendments do not adopt the lower $1.5 billion reporting threshold for advisors to large private equity funds; the existing threshold of $2 billion in assets under management from private equity funds remains in place to be considered a major advisor to private equity funds. The SEC also failed to adopt several reporting items, particularly for large private equity fund advisers, originally included in the proposal.