NEW FORM PF AMENDMENTS – KEY OPERATIONAL, COMPLIANCE AND INVESTOR CONSIDERATIONS
In the wake of the global financial crisis of 2008, many regulators in leading economies adopted regulations to measure and monitor the contribution that private funds such as hedge funds, funds of funds and private equity (PE) funds have on the systemic risk to the financial system.
For example, regulations such as Form PF and AIFMD/Annex IV were implemented by US and European regulators. Since that time, there has been a growing trend toward more stringent regulatory reporting requirements and enhanced oversight by regulatory bodies globally.
Most recently, in May 2023 the US Securities and Exchange Commission (SEC) adopted new amendments to Form PF that will likely pose significant operational, compliance, risk management and investor-related challenges for many asset managers of private funds. Form PF is a confidential report submitted to the SEC by certain registered investment advisers of private funds. The most recent Form PF amendments are intended to further enhance the ability of the Financial Stability Oversight Council (FSOC) to assess systemic risk, bolster the SEC’s oversight of private funds and provide better overall protection to investors.
These new Form PF amendments will apply to: (i) hedge fund advisers with at least $1.5bn in regulatory assets under management; (ii) PE fund advisers with at least $150m in regulatory assets under management; and (iii) large PE fund advisers with at least $2bn in regulatory assets under management.
The May 2023 amendments are outlined below.
First, hedge fund advisers must file a report no later than 72 hours after a trigger event, including extraordinary investment losses, notable margin and default events, termination or restriction of prime brokers, disruptive operations events, and events surrounding withdrawals and redemptions.
Oct-Dec 2023 Issue
GRMA, Inc.