Written by: Jay Gould and Peter Chess
1. What is the Form PF?
The Form PF (PF is short for “private funds”) is a new form that focuses mainly on private fund reporting with regard to information such as counterparty dealings, leverage, and investment exposure. A “private fund” under the Form PF refers to any issuer that would be an investment company under the Investment Company Act of 1940, as amended, if not for the exemptions provided by Sections 3(c)1 or 3(c)7 of that Act. Under some circumstances, non-“private funds” such as money market funds registered with the SEC may be required to report on the Form, in addition to “private funds.”
2. Do investment advisers need to file the Form PF?
Yes, in certain circumstances. Only investment advisers registered with the SEC that meet a $150 million threshold must report on the Form PF. The $150 million threshold refers to a specific and somewhat complicated calculation with regard to regulatory assets under management.
3. What are the categories of filers?
Advisers required to file the Form PF need to determine which category of filer corresponds to them. Large private fund advisers are categorized as either large hedge fund advisers, large liquidity fund advisers, or large private equity fund advisers. Large hedge fund advisers are those having at least $1.5 billion in regulatory assets under management attributable to hedge funds, subject to other conditions. Large liquidity fund advisers are those having at least $1 billion in regulatory assets under management attributable to “liquidity funds” and money market funds registered with the SEC, subject to other conditions. Large private equity fund advisers are those having at least $2 billion in regulatory assets under management attributable to private equity funds, subject to other conditions. All other filers are categorized as smaller private fund advisers.
4. What are the reporting deadlines?
Initial compliance under the Form PF will be in phases. The first required filers will be large private fund advisers with at least $5 billion attributable to hedge funds, to liquidity funds, or to private equity funds. These large hedge fund advisers will have 60 days, and large liquidity fund advisers will have 15 days, after the end of the first fiscal quarter ending on or after June 15, 2012, to file their first Form PF.
Other filers will have to make their first filing by the deadline following the end of the first fiscal quarter for each adviser, as applicable, on or after December 15, 2012. Under the initial compliance, many advisers will not need to file their first Form PF until 2013.
Going forward, the Form PF must be filed:
- For large hedge fund advisers, within 60 days of its fiscal quarter end;
- For large liquidity fund advisers, within 15 days of each fiscal quarter end; and
- For other filers, within 120 days of each fiscal year end.
5. What constitutes the Form PF?
The Form PF, in its entirety, contains sixty pages, and is divided into four sections with corresponding subsections. Most advisers will not have to complete all four sections. The four sections feature reporting on, among other things: identifying information about the adviser; fund-by-fund reporting by all advisers about items such as fund identification, performance and valuation; fund-by-fund reporting by hedge fund advisers about items such as strategies, counterparties, and trading practices; aggregated private fund reporting for large hedge fund advisers; fund-by-fund reporting by large hedge fund advisers about items such as asset classes, portfolio liquidity, and risk metrics; fund-by-fund reporting for large liquidity fund advisers; and, fund-by-fund reporting for large private equity fund advisers.
6. What about the confidentiality of information reported?
Because of the nature of governmental sharing of the data provided on the Form PF, advisers should consider the options available to them with regard to preserving confidentiality. Consequently, advisers should consider changing their overall recordkeeping practices so that they routinely identify funds solely by numerical or alphabetical designations.
7. How is the Form PF filed?
The Form PF will be filed using the same IARD system on which advisers make the Form ADV filing.