SEC And CFTC Propose New Form PF Amendments

Key Takeaways

• On April 20^th, the SEC and the CFTC (the “Commissions”) released a joint proposal (the “Proposal”) to amend Form PF.
• This Proposal would entirely eliminate reporting obligations for advisers with less than US$1 billion in private fund AUM and raise the reporting threshold for large hedge fund advisers from US$1.5 billion to US$10 billion in hedge fund AUM.
• The Proposal solicits input from advisers on the treatment of private credit funds, streamlines certain requirements, and corrects errors and inconsistencies throughout the form.
• The Proposal also curtails the “current” reporting requirements the SEC implemented for large hedge fund advisers two years ago.
• Although the Proposal would reduce reporting burdens for some advisers, it does little to reduce the overall scope of the form.

Expected Timing and Impact on Prior Amendments

The Proposal leaves the clock ticking on the implementation of the 2024 amendments. Specifically, rather than discarding those amendments, the Commissions used that version as the starting point—retaining certain elements, while eliminating or modifying others. Absent further action by the Commissions, the 2024 amendments will come into effect on October 1, 2026.

The Proposal includes a 12-month transition period, which means that form amendments reflected in the Proposal, if adopted, would likely not come into effect until late 2027 at the earliest. The Commissions noted in the Proposal that they would consider how the timing of any amendments relates to the current October 1 compliance date for the 2024 amendments.

Key Elements of the Proposal

Increased Filing and Reporting Thresholds. The Proposal would raise the Form PF filing threshold for all filers from US$150 million to US$1 billion in private fund AUM and would separately raise the reporting threshold for large hedge fund advisers from US$1.5 billion to US$10 billion in hedge fund AUM. These amendments would eliminate or reduce Form PF filing obligations for a significant swath of SEC-registered private fund advisers. While the Proposal did not increase the large private equity fund adviser threshold, the Proposal would require the SEC staff to reassess each filing and reporting threshold approximately every 5 years.

Changes to Current Event Reporting.The Proposal would amend current event reporting for large hedge fund advisers (Section 5 of Form PF) to (i) afford advisers the full 72-hour filing window to file a report (removing the “as soon as practicable” instruction) and (ii) reduce the types of events that trigger current reporting.

Elimination of Quarterly Event Reporting.The Proposal would eliminate quarterly event reporting for all private equity fund advisers (currently Section 6 of Form PF).

Streamlined Reporting and Corrections. The Proposal would remove a number of other existing requirements, including the obligation to separately report master-feeder and parallel fund structures, the “look through” requirements for funds investing in other funds, identification requirements for certain trading vehicles, certain performance volatility reporting, certain trading and clearing reporting, portfolio turnover reporting, and rehypothecation reporting, among others. The Proposal would also streamline certain other reporting obligations and implement a number of corrections and adjustments to the current form. Even with these changes, the form would remain complex and expansive.

Request for Comment on Private Credit Reporting.One particularly challenging aspect of the current Form PF is the expansive definition of “hedge fund,” which currently requires enhanced reporting by many funds traditionally considered private equity or private credit funds. Although the Proposal does not expressly address this issue, the Commissions are seeking public comment on whether to separately define “private credit fund,” and expand or replace current reporting requirements with alternative reporting that is better tailored to the risks associated with private credit investment strategies. 

Next Steps

Public comments on the Proposal will be due 60 days after publication in the Federal Register. While we expect the Proposal will be welcomed by the broader private funds industry, private credit advisers in particular should consider engagement with the Commissions through the comment process to advocate for better alignment of Form PF with the risks associated with their investment strategies.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.