The Securities and Exchange Commission (the "SEC")
held an open meeting on Wednesday, October 26, 2011, regarding the adoption of
a rule requiring certain registered investment advisers to hedge funds and
other private funds to report information on Form PF for use by the Financial Stability
Oversight Council ("FSOC") in monitoring systemic risk to the U.S.
financial system. The new rule, Rule 204(b)-1 under the Investment Advisers Act
of 1940, would implement sections 404 and 406 of the Dodd-Frank Act and was
initially proposed, along with the Form PF, on January 26, 2011. See 76
Fed. Reg. 8068 (Feb. 11, 2011).
At the meeting on Wednesday, the SEC unanimously approved
the final version of Form PF and highlighted the manner in which the final form
differs from the form as proposed. This memorandum summarizes the key Form PF
changes that were highlighted at the meeting. The SEC has not yet published the
full text of the adopting release or the final version of the Form PF. This
memorandum will be updated after those are published.
"Tiered" Threshold for Reporting
The SEC introduced a "tiered" threshold of assets under
management ("AUM") approach for purposes of determining an adviser's
Form PF reporting obligations. In particular:
The AUM threshold for
advisers to liquidity funds ("Large Liquidity Fund Advisers")
was not increased and therefore remains at $1 billion.
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