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February 7, 2022

SEC Proposes Amendments to Form PF and New and Enhanced Reporting Requirements for Private Fund Advisers

The Securities and Exchange Commission (“SEC” or “Commission”) recently proposed amendments to the From PF. The proposal includes:

(I) new reporting requirements for large hedge fund advisers and private equity funds,  obligating such entities to report a number of specified events to the SEC within one business day of their occurrence;
(ii) a lowered threshold for large private equity adviser reporting; and
(iii) certain revised reporting questions for private equity funds.
The proposed amendment, as described by the SEC, is an effort “to enhance the Financial Stability Oversight Council’s (FSOC) ability to assess systemic risk as well as bolster the SEC’s regulatory oversight of private fund advisers and its investor protection efforts in light of the growth of the private fund industry.” A more detailed summary is set forth below.
 

New Reporting Requirements

The proposed amendments would require large hedge funds and private equity funds to file reports within one business day of the occurrence of certain key events.
Key events for hedge funds may include:
  • extraordinary investment losses;
  • counterparty defaults; and
  • certain margin events and investor redemptions.
Key events for private equity funds include:
  • the execution of adviser-led secondary transactions;
  • implementation of general partner or limited partner termination of a fund’s investment period; or
  • termination of a fund.


Lowered Threshold and New Reporting Requirements for Private Equity Advisers

The proposed amendments 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 proposal would also amend Section 4 of Form PF for large private equity advisers in an effort to gather more information regarding fund strategies, use of leverage, and portfolio company financing strategies and activities.

 If you have any questions about this alert, or any other regulatory matters, do not hesitate to reach out to Daniel Viola (Partner – Head of the Regulatory group) at 212.573.8038 or via email at dviola@sadis.com, or to Nicole Arrow (Associate) at 212.573.8148 or via email at narrow@sadis.com.