Form PF: Challenges Facing Private Fund Advisers

Form PF represents a new and complex regulatory reporting requirement with respect to private funds[1] of SEC registered investment advisers. Form PF requires private fund advisers to report new data points with increased granularity.

Key requirements include:

• Periodic reporting on performance, risk, investor, and portfolio information, which has previously been outside the scope of regulatory reporting and SEC supervision.
• Identification and aggregation of funds deemed to have parallel strategies to determine whether a private fund is a qualifying hedge fund for regulatory purposes.
• Ongoing assessment of funds subject to reporting based on variable fund characteristics, such as AUM and trading strategies.
• Reporting on non-standardized metrics, including: portfolio liquidity, investor liquidity, financing liquidity, and trading and clearing mechanisms.

Each of these elements presents significant business, technology, operational, and data challenges, which need to be rapidly addressed by the industry.