SEC Proposes Amendments to Internet Adviser Exemption

SEC Proposes Amendments to Form PF for Investment Advisers to Private Funds

January 27, 2022

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Yesterday, the U.S. Securities and Exchange Commission (“SEC”) proposed amendments to the Form PF, the confidential reporting form for certain SEC registered investment advisers to private funds.

First, the SEC proposed that investment advisers to large hedge funds report within one day extraordinary investment losses, significant margin and counterparty default events, material changes in prime broker relationships, changes in unencumbered cash, operations events, and events associated with withdrawals and redemptions.  Likewise, advisers to private equity funds would be required, as proposed, to report within one business day events pertaining to the execution of adviser-led secondary transactions, implementation of general partner or limited partner claw backs, removal of a fund’s general partner, termination of a fund’s investment period, or termination of a fund.

Second, the proposed amendments to the Form PF would reduce the threshold for reporting as a large private equity adviser from $2 billion to $1.5 billion in private equity fund assets under management.  The large private equity adviser would be required to report more information regarding fund strategies, use of leverage and portfolio company financings, controlled portfolio companies (“CPCs”) and CPC borrowings, fund investments in different levels of a single portfolio company’s capital structure, and portfolio company restructurings or recapitalizations.

Third, the proposed amendments by the SEC would require large liquidity fund advisers to report substantially the same information that money market funds would report on Form N-MFP.

For additional information, the SEC has prepared a Fact Sheet Proposed Amendments to Form PF.  The SEC is taking comments on this proposal for 30 days after publication in the Federal Register.

RIA Compliance Consultants provides services to assist an investment adviser firm managing the assets of a private fund in the creation and filing of the Form PF. To set up an introductory call, please utilize our online calendar.


Related Posts & Resources

Frequently Asked Questions: Form PF

Service: Form ADV Annual Amendment Only Service (Managing Private Fund)

Blog: Compliance Concerns for Private Funds

Webinar:  Compliance Concerns for Private Funds

Blog: Private Fund Adviser Enforcement Action

Checklist: Private Equity – Compliance Checklist for Investment Adviser When Recommending PE Investment

Sample Form: Diligence – Alternative Investment – Review Form

General Disclosure

The information contained in this blog post is general in nature, intended for educational purposes only and is not intended to be a comprehensive analysis of this topic. It is not intended to constitute compliance consulting advice or apply to any particular investment adviser firm’s specific situation. Please consult the applicable securities regulator’s rules and published guidance for more details about the topics referenced above. For more information about the limitations of this blog post and information on our website, please see our Disclosures webpage.

Posted by Bryan Hill
Labels: Form PF, Private Funds, SEC, Uncategorized