Regulators Propose Major Shifts to Private Fund Reporting Rules
Joint proposal aims to raise asset thresholds and streamline Form PF requirements following a review of current disclosure obligations.
The Securities and Exchange Commission and the Commodity Futures Trading Commission have jointly proposed amendments to Form PF designed to reduce reporting burdens for private fund advisers. The agencies intend to modify the confidential reporting form used by registered investment advisers, including those dual-registered as commodity pool operators or commodity trading advisors. These changes seek to balance the need for investor protection with the necessity of avoiding excessive compliance costs for market participants.
A central element of the proposal involves significantly raising the filing threshold for private fund advisers. Under the new framework, the requirement to file Form PF would increase from the current $150 million in private fund assets under management to $1 billion. This adjustment aims to eliminate filing obligations for smaller advisers, a group that currently accounts for nearly half of all entities required to submit the form.
The regulators also plan to increase the exposure reporting threshold for large hedge fund advisers. The proposal would raise the limit from $1.5 billion in hedge fund assets under management to $10 billion. Despite these higher thresholds, the agencies state that Form PF would continue to capture information representing over 90 percent of private fund gross assets. Detailed exposure information would remain mandatory for funds managed by these larger hedge fund managers.
Beyond adjusting the numerical thresholds, the amendments seek to streamline various existing requirements within Form PF. The proposed changes include a new method to identify funds active in the private credit market, ensuring the form remains relevant to evolving investment strategies. The SEC and CFTC emphasise that these modifications are intended to rationalise the scope of the form while maintaining the collection of data necessary for the Financial Stability Oversight Council to monitor systemic risk.
SEC Chairman Paul S. Atkins described the initiative as a step toward restoring balance to disclosure obligations and reducing compliance costs. He noted that previous amendments had created burdens that distracted advisers from their core investment functions without providing commensurate benefits to regulators. CFTC Chairman Michael S. Selig echoed this sentiment, stating that the goal is to eliminate unnecessary costs while ensuring the collected data remains appropriate for investor protection efforts.
The proposing release is set for publication in the Federal Register, triggering a public comment period that will remain open for 60 days. The agencies have invited feedback on all proposed amendments to ensure the final rules effectively address the intended outcomes. Once the comment period concludes, the regulators will review the submissions before finalising the amendments to the reporting framework.