On July 23, 2014, the Securities and Exchange Commission (“SEC”) adopted final rules governing money market funds in a release adopting amendment to Rule 2a-7 under the Investment Company Act of 1940 and other related changes. The latter include amendments to Form PF that will affect large liquidity fund advisers with at least $1 billion in assets (the “Adopting Release”).  The amendments become effective 60 days after their publication in the Federal Register (the “Effective Date”). The deadline for complying with the Form PF amendments is 18 months after the Effective Date.
I. SEC Comments on Purpose of Form PF Amendments
In the Adopting Release, the SEC cited its concern that investors would respond to the SEC’s proposed money market reforms by shifting assets from money market funds to unregistered products, such as liquidity funds. To address this concern, the SEC stated that it was revising Form PF to expand the information that advisers to liquidity funds will be required to report on the liquidity funds they advise. The SEC stated that the amended Form PF disclosures were designed to achieve these two goals: 1) to ensure that the money market fund rule changes do not decrease transparency in short-term financing markets by helping the Financial Services Oversight Council to monitor and address related systemic risks and to enable the SEC to develop effective regulatory policy responses, if investors actually do shift assets from money market funds to liquidity funds; and 2) to enable administration of relevant regulatory programs even if there is no asset-shift resulting from money market reforms, as the increased liquidity-fund transparency, combined with the SEC’s money market fund information from Form N-MFP, will provide the regulators a more complete picture of the short-term financing markets in which liquidity and money market funds both invest. Those amended disclosures are discussed below.
II. Form PF Amendments
Currently, Section 3 of Form PF requires large liquidity fund advisers  to report information on their liquidity funds, including on each fund’s portfolio holdings, by disclosing product exposure by maturity date and percentage of net asset value by asset class. The amendments in the Adopting Release eliminate these reporting requirements and replace them with much more detailed portfolio reporting requirements, including disclosures on a security-by-security basis, which are intended to replicate the reporting requirements for money market funds in Form N-MFP. The Adopting Release amendments also require that large liquidity fund advisers identify on Form PF any other money market funds they or an affiliate advises with substantially the same investment objectives and strategies and that invest side-by-side with the reporting liquidity fund. Large liquidity fund advisers are currently required to file a Form PF quarterly; the Adopting Release amendments did not change that requirement. A breakdown of the Form PF amendments is detailed in the following section.
A. Requirement to Provide Portfolio Information Instead of Information Regarding Product Exposures and Breakdown of NAV
Specifically, the Adopting Release amendments eliminate Form PF’s current Questions 56 and 57, which require a large liquidity fund adviser to report, respectively: a) selected product exposures by maturity date for liquidity fund assets under management (“AUM”), and b) for each month during the reporting period, the position, percentage of net asset value (“NAV”), and sub-asset class, for each of the reporting fund’s open positions that represents 5% or more of its NAV. The SEC indicated that it would be able to derive the information from these eliminated questions from the new Question 63.
The SEC added Question 63 as a single item in Section 3, “Item E. Portfolio Information.” This item is comprised of various subsections that will require large liquidity fund advisers to report the following information for each portfolio security in each liquidity fund they manage, broken down by each month of the quarterly reporting period:
The name of the issuer;
The title of the issue;
Certain security identifiers (i.e., CUSIP, LEI, ISIN, CIK or other unique identifier);
The category of investment that most closely identifies the instrument (e.g., Treasury debt, U.S. government agency debt, asset-backed commercial paper, certificate of deposit, repurchase agreement);
If the rating assigned by a credit rating agency played a substantial role in the liquidity fund’s (or its adviser’s) evaluation of the quality, maturity or liquidity of the security, the name of each credit rating agency and the rating each credit rating agency assigned to the security;
The maturity date used to calculate weighted average maturity;
The maturity date used to calculate weighted average life;
The ultimate legal maturity date;
Whether the instrument is subject to a demand feature, guarantee, or other enhancements, and information about any of these features and their providers;
The yield of the security as of the reporting date;
The value of the fund’s position in the security and, if the fund uses the amortized cost method of valuation, the amortized cost value, in both cases with and without any sponsor support;
The percentage of the liquidity fund’s assets invested in the security;
Whether the security is categorized as a level 3 asset or liability on Form PF;
Whether the security is an illiquid security, a daily liquid asset, and/or a weekly liquid asset, as defined in rule 2a-7; and
Any explanatory notes (including any other information that may be material to other disclosures related to the portfolio security).
B. Identification of Parallel Money Market FundsThe Adopting Release amendments also added Question 64 as a new item in Section 3, “Item F. Parallel Money Market Funds.” Question 64 will require large liquidity fund advisers to provide the EDGAR series identifier of any money market fund advised by the adviser or its related persons that pursues substantially the same investment objective and strategy, and invests side-by-side in substantially the same positions as, a liquidity fund the adviser reports on Form PF.
The date to comply with the Adopting Release’s Form PF amendments is more than 18 months away. Yet, those amendments will require an adviser to large liquidity funds to report on each security held by the reporting liquidity fund, instead of the fund’s AUM and NAV more generally. The breadth and detail of these new required disclosures necessitate a liquidity fund adviser’s prompt review of the amendments to ensure the adviser is adequately prepared and staffed to report timely the new Form PF information required.
A link to the SEC’s final release can be found here: http://www.sec.gov/rules/final/2014/33-9616.pdf. Given that the release is 869 pages, please note that the section detailing the Form PF amendments begins on page 454.
 Money Market Fund Reform; Amendments to Form P-F, Investment Company Act Release No.31166 (July 23, 2014).
 On October 31, 2011, SEC issued a joint release with the Commodities Futures Trading Commission (the “CFTC”) in which the SEC adopted Form PF (and the CFTC adopted equivalent Forms CTO-PQR and CTA-PR), which requires all SEC-registered advisers to private funds with at least $150 million in private fund assets under management as of the last day of its most recently completed fiscal year to report information about the private funds they advise. See SEC Release No. IA-3308.
 The SEC also originally proposed that large liquidity fund advisers provide lot level information about any securities that their liquidity funds purchased or sold during the reporting period. However, the SEC was persuaded that the costs of reporting lot level information did not justify the potential benefits and that the data may be better collected on a more systematic market-wide basis. Therefore, the SEC did not adopt the proposed amendment to require lot level reporting on Form PF.
 Large liquidity fund advisers are those advisers who 1) advise at least one liquidity fund; and 2) manage, collectively with their (non-separately operated) related persons, at least $1 billion in combined liquidity fund and money market fund assets as of the last day of any month in the fiscal quarter immediately preceding the last competed fiscal quarter. See Adopting Release, p. 457. Form PF defines a “liquidity fund” as “[a]ny private fund that seeks to generate income by investing in a portfolio of short term obligations in order to maintain a stable net asset value per unit or minimize principal volatility for investors.” See Glossary to Form PF.