An EIA which summarizes the new
Form PF adopted on October 21, 2011 by the Securities and Exchange Commission.
This form is used to collect information from private fund advisers, primarily
to assist the Financial Stability Oversight Council ("FSOC") in
determining whether any such funds present systemic risks to the U.S. financial
The SEC on October 31, 2011
adopted Form PF, which will be used to collect information from private fund
advisers, primarily to assist the Financial Stability Oversight Council
("FSOC") in determining whether any such funds present systemic risks
to the U.S. financial system. The SEC also adopted Rule 204(b)-1 under the
Investment Advisers Act of 1940, requiring private fund advisers to file the
form. At the same time, the CFTC adopted Sections 1 and 2 of the form and Rule
4.27 under the Commodity Exchange Act, requiring commodity pool operators and
commodity trading advisors that are also registered with the SEC as private
fund advisers to report on Form PF. The Dodd-Frank Wall Street Reform and
Consumer Protection Act, enacted in July 2010, directs the two agencies to
adopt such reporting requirements.
Although the Form remains lengthy and detailed, the agencies made a number of
adjustments intended to accommodate the manner in which they believe private
fund advisers actually calculate various parameters and keep their internal
records. They also extended the initial filing deadlines well into 2012. The
Form retains the graduated reporting scheme proposed by the agencies in January
and adds a new tier: small entities are exempt from reporting altogether, and
beyond that, all advisers to private funds must file at least the basic
information called for by Section 1 of the Form. Larger managers of hedge
funds, liquidity funds and private equity funds must file the additional
information required by Sections 2a, 3 and 4 of the Form, respectively, and
managers of the largest hedge funds must file further detail under Section 2b.
While this EIA summarizes the elements of the Form and requirements for
compliance with the implementing rules, it cannot do justice to their
complexity. The alert is divided into sections that provide an overview of
different aspects of the rule or parts of the Form, starting with a description
of significant changes from the proposed rule and Form and the threshold
requirements determining which advisers must file the Form. The alert
summarizes Part 1, which all filing advisers must complete; Part 2, which hedge
fund advisers and CFTC registrants must complete; Part 3, which liquidity fund
advisers must complete; and Part 4, which private equity fund advisers must
complete. Next, the alert analyzes the policy purposes for which the
information on the Form will be used and the confidentiality protections (such
as they are) provided by the regulators. The alert concludes with a summary of
the rule's effective dates, the phased commencement of filing requirements, and
the required frequency of filing. [footnotes omitted]
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Arthur Delibert is a partner at K&L Gates LLP represents and advises U.S.
investment companies, investment advisers, investment company independent
trustees, and fund distributors. Investment company clients include single-tier
funds, master-feeder funds, and multiple-class funds. As co-chair of the
Training Committee, Mr. Delibert is responsible for organizing the firm's
training program in the law of investment management.Mark Perlow is a partner at K&L Gates LLP
and his practice focuses on investment management and securities law. He
regularly represents mutual funds, hedge fund managers, investment advisers,
fund boards of directors, and broker-dealers on a variety of regulatory and