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The Securities and Exchange Commission proposed a new
rule that would require advisers to private funds to report information for use
by the Financial Stability Oversight Council in monitoring risk to the U.S.
financial system. Sections 404
of the Dodd-Frank Wall Street Reform and Consumer Protection Act requires
the SEC to gather this information.
The SEC is proposing a new Rule 204(b)-1 under the
Investment Advisers Act that would require SEC-registered investment advisers
to report systemic risk information on Form PF if they advise one or more
Each private fund adviser would report basic information
about the operations of its private funds on Form PF once each year. Large
Private Fund Advisers would be required to submit this basic information each
quarter along with additional systemic risk related information required by
Form PF concerning certain of their private funds.
"Large Private Fund Advisers" would be
The SEC estimates that approximately 4,450 advisers would
be required to file Form PF. Of those, approximately 3,920 would be smaller
private fund advisers not meeting the thresholds for reporting as Large Private
It looks like the definition of private equity fund for
purposes of the Large Private Fund Adviser reporting requirements will exclude
real estate funds.
Private equity fund:
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.
Under the proposed rule, real estate private equity funds
will be subject to the annual reporting, but not subject to the more detailed
quarterly reporting. This is just a proposed rule, so the final requirements
and definitions may change in the final rule when it is issued. In the
meantime, you can make
additional commentary on developments in compliance and ethics, visit Compliance Building,
a blog hosted by Doug Cornelius.
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