SEC Reports on Use of Form PF Data

The SEC has issued its annual report on use of Form PF data. In its  examination and enforcement programs regarding registered investment advisers that manage private funds, the staff generally reviews information contained in the Form PF filing for inconsistencies with other information obtained from an adviser during an examination, such as due diligence reports, pitch books, offering documents, operating agreements and books and records. In addition, SEC staff typically looks for discrepancies between an adviser’s Form PF filing and any publicly-available documents related to the adviser, including the adviser’s Form ADV and brochure.

In risk monitoring activities, the staff has incorporated Form PF data to assist staff in risk monitoring activities through a proprietary analytical program known as DERA.  For example, staff queries the DERA database to identify advisers engaging in activities implicating particular areas of examination focus (exposures, valuation, high-frequency trading, etc.) and to identify possible red flags at firms that may trigger examinations.  Staff are also developing periodic reports that analyze data across a wide spectrum of filers to help identify trends and possible emerging risks in the private fund industry.

Topics:  Compliance, Enforcement, Enforcement Actions, Form PF, Private Funds, SEC

Published In: General Business Updates, Finance & Banking Updates, Securities Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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