Form PF; Reporting Requirements for All Filers and Large Hedge Fund Advisers

The SEC and CFTC jointly proposed amendments to Form PF to enhance systemic risk monitoring and regulatory oversight of private fund advisers by requiring more granular, standardized, and timely reporting on leverage, derivatives, counterparty exposures, digital assets, and fund structures, with compliance thresholds tied to asset size and filing deadlines based on fund type.

The SEC and CFTC proposed sweeping amendments to Form PF to strengthen oversight of private fund advisers, particularly those managing $500 million or more in net asset value, with some provisions targeting advisers above $1.5 billion. The revisions mandate quarterly filings (within 60 or 15 days for hedge and liquidity funds, respectively), require Legal Entity Identifiers (LEIs) for funds and counterparties, and introduce detailed disclosures on master-feeder structures, derivatives, leverage, volatility, drawdowns, and digital asset exposures. These changes aim to improve data comparability, align with international standards, eliminate redundant reporting, and bolster the Financial Stability Oversight Council’s ability to monitor systemic risk.

The SEC and CFTC jointly proposed comprehensive amendments to Form PF to enhance the Financial Stability Oversight Council’s (FSOC) ability to monitor systemic risk and improve regulatory oversight of private fund advisers, especially those managing $500 million or more in net asset value, with heightened requirements for advisers above $1.5 billion. The revisions mandate quarterly reporting on a calendar-quarter basis—within 60 days for hedge funds and 15 days for liquidity funds—and require the use of Legal Entity Identifiers (LEIs) for all funds and counterparties. Advisers must now provide detailed 'look-through' disclosures on master-feeder and parallel fund structures, counterparty exposures exceeding 5% of NAV or $1 billion, derivatives positions, leverage metrics, volatility, and drawdowns, while also reporting digital asset exposures. The amendments standardize definitions, eliminate outdated or redundant reporting requirements, and introduce consistent valuation methods and sub-asset class classifications such as base metals, ADRs, and repos. These changes are designed to improve data accuracy, comparability, and transparency across the private fund industry, aligning U.S. reporting with international standards. Estimated compliance costs are expected to be offset by long-term benefits in risk detection and regulatory efficiency. The agencies are soliciting public comment on the proposal and whether similar changes should apply to Form ADV, with comments due by October 11, 2022.