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In addition to filing Form ADV with the SEC when they
register with the Securities and Exchange Commission, private fund managers
will also need to start filing Form PF next year.
The amount of information required by Form PF is tiered.
Advisers managing less than $150 million in private funds
are not required to file, as these firms are not likely to generate systemic
risk within the financial industry.
Smaller private fund advisers must file Form PF only once
a year within 120 days of the end of the fiscal year, and report only basic
information regarding the private funds they advise. This includes limited
information regarding size, leverage, investor types and concentration, liquidity,
and fund performance. Smaller advisers managing hedge funds must also report
information about fund strategy, counterparty credit risk, and use of trading
and clearing mechanisms.
Larger private fund advisers must provide more detailed
information than private fund advisers. For example, large hedge fund advisers
managing more than $1.5 billion (this threshold was raised from $1 billion in
the proposed rule) need to file additional information on Form PF. Large
private equity advisers with $2 billion in assets under management (this
threshold was raised from $1 billion in the proposed rule) also must submit
additional information on Form PF.
Altogether, the seven types of private fund defined in
Form PF are: (1) hedge fund; (2) liquidity fund; (3) private equity fund; (4)
real estate fund; (5) securitized asset fund; (6) venture capital fund; and (7)
other private fund.
For real estate private equity funds, the FORM PF defines
"private equity fund" as any private fund that is not a hedge fund, liquidity
fund, real estate fund, securitized asset fund or venture capital fund and does
not provide investors with redemption rights in the ordinary course. So real
estate funds should only have to make the shorter annual report.
Regarding timeframes, smaller private fund advisers and
smaller private equity fund advisers only need to file Form PF once per year.
Larger hedge fund advisers must file Form PF quarterly and have 60 days after
each quarter ends to submit the form. (This is longer than the originally proposed
Most private fund advisers will be required to begin
filing Form PF following the end of their first fiscal year or fiscal quarter,
as applicable, to end on or after December 15, 2012. However, three categories
of advisers must begin filing Form PF following the end of their first fiscal
year or fiscal quarter, as applicable, to end on or after June 15, 2012:
One other noteworthy change to Form PF requirements is
that advisers will not be required, as originally proposed, to formally certify
that information submitted on Form PF is "true and correct" under penalty of
SEC has chosen FINRA to accept Form PF filings. That
means more use of the IARD filing system. And perhaps, moving a step closer to
FINRA becoming the SRO for investment advisers.
additional commentary on developments in compliance and ethics, visit Compliance Building,
a blog hosted by Doug Cornelius.
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