On February 8, 2024, the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) adopted amendments regarding private fund reporting. The SEC previously adopted Form PF amendments in May 2023, with a similar goal to enhance transparency and oversight.
“Since Form PF first was adopted, the SEC, CFTC, and FSOC have identified gaps in the information we receive from private fund advisers,” said SEC Chair Gary Gensler. “These amendments to Form PF will enhance the Commissions’ and FSOC’s understanding of the private fund industry as well the potential systemic risk posed by the industry and its individual participants. In addition, the adoption also furthers investor protection efforts.”
According to the Fact Sheet provided by the SEC, the amendments will:
- Enhance reporting by large hedge fund advisers regarding qualifying hedge funds to provide better insight into the operations and strategies of these funds and their advisers and to improve data quality and comparability;
- Enhance reporting of hedge funds to provide greater insight into hedge funds’ operations and strategies, to assist in identifying trends, and to improve data quality and comparability;
- Amend how advisers report complex structures to improve the ability of the Financial Stability Oversight Council (FSOC) to monitor and assess systemic risk and to provide greater visibility for both FSOC and the Commissions into these arrangements; and
- Remove aggregate reporting for large hedge fund advisers to lessen the burden on advisers and to focus Form PF reporting on more valuable information for systemic risk assessment purposes.
Within the Fact Sheet, the SEC also stated, “Form PF provides the Commissions and FSOC with important, confidential information about the basic operations and strategies of private funds and their advisers and has helped to establish a baseline picture of the private fund industry for use in assessing systemic risk. The amendments to Form PF will enhance FSOC’s ability to monitor and assess systemic risk and bolster the SEC’s regulatory oversight of private fund advisers and investor protection efforts.”
Amendments will go into effect a year after publication in the Federal Register.
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