Advisers to private funds will have a host of new reporting requirements in the near future. As previously detailed on this blog, the SEC adopted amendments to Form ADV that, among other things, expand the information collected regarding private funds. In addition to Form ADV, certain SEC-registered investment advisers will be required to periodically file a new reporting form, known as Form PF.
First, it is important to note that only SEC-registered advisers with at least $150 million in private fund assets under management must file Form PF. These private fund advisers are divided by size into two broad groups – large advisers and smaller advisers. The amount of information reported and the frequency of reporting are largely determined on the basis of these classifications.
“Large private fund advisers” are defined as:
- Advisers with at least $1.5 billion in assets under management attributable to hedge funds.
- Liquidity fund advisers with at least $1 billion in combined assets under management attributable to liquidity funds and registered money market funds.
- Advisers with at least $2 billion in assets under management attributable to private equity funds. All other respondents are considered smaller private fund advisers.
Most advisers will be classified as “smaller private fund advisers.” They must file Form PF only once a year within 120 days of the end of the fiscal year, and report only basic information regarding the private funds they advise. This includes limited information regarding size, leverage, investor types and concentration, liquidity, and fund performance. Smaller advisers managing hedge funds must also report information about fund strategy, counterparty credit risk, and use of trading and clearing mechanisms.
There will be a two-stage phase-in period for compliance with Form PF filing requirements. Most private fund advisers will be required to begin filing Form PF following the end of their first fiscal year or fiscal quarter, as applicable, to end on or after Dec. 15, 2012. Those with $5 billion or more in private fund assets must begin filing Form PF following the end of their first fiscal year or fiscal quarter, as applicable, to end on or after June 15, 2012.
How We Can Help Ensure Compliance
Of course, this post provides only a brief overview of the compliance issues facing private fund advisers. If you are concerned about complying with the new Form PF or any other new regulatory requirements, please contact us today to find out how we can help.
Eckerle Law offers a highest-quality and cost-effective alternative to the traditional law firm model for a wide variety of transactional and regulatory matters serving all your business law needs. Our experienced attorneys also provide a full range of compliance services for investment advisers, offering compliance tools that are tailored to fit the ever changing regulatory landscape as well as your business needs.
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