The following are some frequently asked questions concerning Form PF registration with the U.S. Securities and Exchange Commission (“SEC”). The information presented here is general in nature and not a substitute for consulting with an investment compliance professional regarding the SEC’s requirements and your unique circumstances. This webpage is not intended to be an all-inclusive analysis of Form PF requirements and you should not rely solely on its contents.
Form PF was adopted by the SEC following the passage of the Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank Act”). “The Dodd-Frank Act amended section 204(b) of the Investment Advisers Act of 1940 (“Advisers Act of 1940″) to require the SEC to establish reporting and recordkeeping requirements for advisers to private funds.” The SEC adopted Form PF “to obtain data that will facilitate monitoring of systemic risk in U.S. financial markets.” Form PF covers all private funds including private equity funds, hedge funds and liquidity funds.
Investment advisers must file a Form PF if registered or required to register with the SEC as an investment adviser; or if registered or required to register with the U.S. Commodity Future Trading Commission (CFTC) as a CPO or CTA and also registered or required to register with the SEC as an investment adviser; and manage one or more private funds; and the investment adviser and its related persons, collectively, had at least $150 million in private fund assets under management as of the last day of its most recently completed fiscal year. The due date for Form PF varies depending on the classification and size of the investment adviser. Many private fund advisers meeting these criteria will be considered a “small” adviser and be required to complete only Section 1 of Form PF and will need to file only on an annual basis. Large private fund advisers, however, will be required to provide additional data, and large hedge fund advisers and large liquidity fund advisers will need to file every quarter.
Advisers that have at least $150 million in private fund assets under management but that do not exceed a “large adviser” threshold must file Form PF only once a year. These “small” private fund advisers are required to fill out basic information on the private funds they advise. This includes limited information regarding size, leverage, investor types and concentration, liquidity, and fund performance. The “smaller advisers” managing hedge funds must also report basic hedge fund information. This includes fund strategy, counterparty credit risk, and use of trading and clearing mechanisms.
The SEC adopted a threshold of $2 billion in private equity fund assets under management to be considered a “large” private equity fund adviser. Form PF defines “private equity fund” as any private fund that is not a hedge fund, liquidity fund, real estate fund, securitized asset fund or venture capital fund and does not provide investors with redemption rights in the ordinary course.
The SEC adopted a threshold of $1.5 billion in hedge fund assets under management to be considered a “large” hedge fund adviser. Form PF defines hedge fund generally to include any private fund having any one of three common characteristics of a hedge fund: (a) A performance fee that takes into account market value (instead of only realized gains); (b) high leverage; or (c) short selling.
The SEC adopted a threshold of $1 billion to be considered a “large” liquidity fund adviser. Form PF defines liquidity fund as any 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.
“Small” and “large” private equity fund advisers must file Form PF annually within 120 days after the end of their fiscal year. They must respond to questions focusing primarily on the extent of leverage incurred by their funds’ portfolio companies, the use of bridge financing, and their funds’ investments in financial institutions.
Large hedge fund advisers must file an updated Form PF within 60 calendar days after the end of their first, second and third fiscal quarters. They must file a quarterly update that answers all Items in Form PF relating to the hedge funds that are advised. Within 60 calendar days after the end of their fourth fiscal quarter, large hedge fund advisers must file a quarterly Form PF update that updates the answers to all items. Large hedge fund advisers may, however, submit an initial filing for the fourth quarter that updates information relating only to the hedge funds they advise so long as they amend Form PF within 120 calendar days after the end of the quarter to update information relating to any other private funds they advise. When large hedge fund advisers file such an amendment, they are not required to update information previously filed for such quarter.
Large liquidity advisers must file an updated Form PF within 15 calendar days after the end of their first, second and third fiscal quarters. They must file a quarterly update that updates the answers to all Items in the Form PF relating to the liquidity funds they advise. Within 15 calendar days after the end of their fourth fiscal quarter, large liquidity advisers must file a quarterly update that updates answers to all Items in their Form PF. Large liquidity advisers may, however, submit an initial filing for the fourth quarter that updates information relating only to the liquidity funds they advise so long as they amend Form PF within 120 calendar days after the end of the quarter to update information relating to any other private funds they advise (subject to the next paragraph). When a large liquidity adviser files such an amendment, it is not required to update information previously filed for such quarter.
Advisers who are both a large hedge fund adviser and a large liquidity fund adviser must file within 15 calendar days after the end of each quarter for liquidity funds and within 60 days for large hedge funds.
For currently registered investment advisers and firms that register as investment advisers in 2012, Form PF has a two-stage period for filing.
For Advisers with at least $5 billion in assets under management attributable to hedge funds, at least $5 billion in combined assets under management attributable to liquidity funds and registered money market funds, or advisers with at least $5 billion in assets under management attributable to private equity funds, the compliance date is June 15, 2012. Such firms must begin filing Form PF following the end of their first fiscal year or fiscal quarter, as applicable, to end on or after June 15, 2012.
Most private fund advisers must begin filing Form PF following the end of their first fiscal year or fiscal quarter, as applicable, ending on or after December 15, 2012. For example, a firm whose quarter ends on December 31st 2012 will need to file its first Form PF report with the SEC by April 30, 2013.
Form PF must be filed electronically through the Form PF filing system on the Investment Adviser Registration Depository (IARD) website.
Filing fees are charged by FINRA to use the IARD system. The filing fees for SEC-registered investment advisers filing Form PF using the IARD system are $150 for each annual report and $150 for each quarterly report.
Where can I find more information on Form PF?
Additional information regarding Form PF can be found on the SEC’s website. The SEC also has its own FAQ for Form PF.
*The information contained in this Frequently Asked Questions webpage is general in nature and intended for educational purposes only and is not intended to be a comprehensive analysis of the securities regulations applicable to registered investment advisers. It is not intended to constitute compliance consulting advice or apply to any particular investment adviser firm’s specific situation. For more information, please see our Disclosures.