• The latest round of revisions to Form PF made a stealthy arrival, with the SEC announcing in mid-February that it adopted the updates without an in-person vote.
• As the third set of amendments to Form PF in the past 12 months, each with overlapping compliance dates, private fund advisers should closely review Form PF requirements in the coming year.
• These amendments signal a continued focus on the oversight of private fund advisers, consistent with the SEC’s adoption of the private fund adviser rules and many other pending regulations.
• These amendments will require disaggregated reporting on the components of certain master-feeder and parallel fund structures and otherwise modify reporting on certain fund structures.

The SEC, on February 8, 2024, adopted amendments to Form PF, a confidential reporting form for certain SEC-registered investment advisers to private funds (the Amendments).¹ The Amendments impose notable changes with respect to the reporting of certain fund structures, including imposing more prescriptive requirements on whether or when to aggregate private funds and other entities. The SEC also made many nuanced changes to both the instructions and questions within Form PF, though it passed on the opportunity to improve problematic features of the form, such as the definitions of fund types.

This is the third set of amendments to Form PF in the last year, each of which is summarized in the below table.² The overlapping effective and compliance dates may lead to confusion surrounding reporting. Likewise, the reporting and disclosure obligations in other recently adopted regulations such as the private fund adviser rules and the marketing rule may also layer in competing or conflicting obligations for private fund advisers. Consequently, advisers should carefully review their Form PF obligations in the coming year.

Background

The SEC adopted Form PF in the wake of the 2008 financial crisis to gather information on private funds for use by the Financial Stability Oversight Council in monitoring systemic risk, and registrants began filing Form PF in respect of their fiscal year-end or quarter-end in 2012.³ In May 2023, the SEC adopted the first significant amendments to Form PF since its adoption.⁴ The amendments expanded the reporting obligations of affected private fund advisers and, among other new obligations, impose new requirements for large hedge fund advisers to report certain triggering events within 72 hours and private equity fund advisers to file a quarterly report within 60 days of quarter end following certain events. In July 2023, the SEC finalized amendments to Form PF to align certain liquidity fund reporting requirements with money market fund reporting.⁵ The most recent Amendments were adopted just 7 months after the last changes to Form PF.

2024 Amendments

Amendments Applicable to All Private Fund Advisers

The Amendments make significant changes to the instructions applicable to all Form PF filers, particularly by removing the option to report certain fund structures on an aggregate basis. The Amendments will generally require separate reporting for each component fund of a master-feeder arrangement and parallel fund structure in contrast to the flexible response format allowed currently. Important nuances appear in the instructions, however, with certain feeder funds disregarded for most purposes (i.e., a feeder fund that invests all of its assets in a single master fund, U.S. treasury bills and/or cash and cash equivalents). However, Form PF will continue to require advisers to aggregate these structures for purposes of determining whether the adviser meets a Form PF reporting threshold.

With respect to certain private funds that invest in other funds, the Amendments will expressly require, rather than permit, the adviser to include the value of the investments in other private funds (both internal and external private funds) when determining whether the adviser is required to file Form PF and whether a Form PF reporting threshold is met.

The Amendments will also require advisers to identify certain “trading vehicles,” a new term for Form PF, as well as to report on an aggregated basis for the reporting fund and such trading vehicles, including those that are partially owned. Trading vehicles are separate legal entities that hold assets, incur leverage or conduct trading or other activities as part of the private fund’s investment activities, but do not operate a business.

Finally, to provide the SEC with greater insight into private funds’ operations and strategies and assist in identifying trends that could create systemic risk, the Amendments will require all Form PF filers to report additional identifying information about the adviser and its related persons, private fund assets under management and other basic information about the private funds’ assets, financing, investor concentration and performance.

Amendments Applicable to All Hedge Fund Advisers

The Amendments also impose obligations on all hedge fund advisers as well as additional requirements on large hedge fund advisers (advisers with at least $1.5 billion in hedge fund assets under management). The Amendments will require such advisers to report new or more detailed information on a hedge fund’s operations and strategies in an effort to improve data quality and comparability for purposes of systemic risk assessments. All hedge fund advisers will be required to report additional information on a hedge fund’s investment strategy, including the fund’s use of digital assets as an investment strategy as well as revised information regarding a hedge fund’s counterparty exposures and use of trading and clearing mechanisms.

Large hedge fund advisers will need to provide more granular reporting on each qualifying hedge fund’s investment exposure, open and large position reporting, borrowing and counterparty exposure, and market factor effects. These changes accompany the consolidation of current sections 2a and 2b of Form PF into a new section 2. The effect of this is to remove certain aggregated reporting large hedge fund advisers in favor of more granular fund-level data.

Additional Amendments

Form PF has also been amended to modify certain private fund performance disclosures, align certain requirements with the CFTC’s Form CPO-PQR and to make a number of other nuanced and technical changes that will require private fund advisers to closely review these Amendments as well as other Form PF amendments as they come into compliance.

Conclusion

The Amendments continue the transformation of Form PF into a tool for a more intrusive regulatory regime for private fund advisers. Especially in light of this increased scrutiny, private fund advisers should carefully review Form PF in the coming year with an eye toward ensuring compliance with overlapping effective and compliance dates for Form PF amendments as well as with respect to other rules and regulations applicable to private fund advisers.

1. Form PF; Reporting Requirements for All Filers and Large Hedge Fund Advisers, 89 Fed. Reg. 17984 (March 12, 2024) (Release). At times, this OnPoint tracks the Release without the use of quotation marks.
2. For a summary of the May 2023 amendments, see SEC Current Reporting Requirements for Private Funds Become Effective in December, Dechert OnPoint (September 19, 2023). For a summary of the July 2023 amendments, see SEC Adopts Significant Money Market Fund Reforms; Enhances Private Liquidity Fund Reporting on Form PF, Dechert OnPoint (August 2, 2023).
3. SEC Approves Confidential Private Fund Reporting, SEC Press Release (October 26, 2011).
4. Form PF; Event Reporting for Large Hedge Fund Advisers and Private Equity Fund Advisers; Requirements for Large Private Equity Fund Adviser Reporting, 88 Fed. Reg. 38146 (June 12, 2023).
5. Money Market Fund Reforms; Form PF Reporting Requirements for Large Liquidity Fund Advisers; Technical Amendments to Form N-CSR and Form N-1A, 88 Fed. Reg. 51404 (August 3, 2023).