SEC and CFTC Jointly Propose Amendments to Reduce Private Fund Reporting Burdens

The Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) jointly proposed amendments to reduce private fund reporting burdens while enabling the continued collection of necessary and appropriate information. The agencies proposed to amend Form PF, the confidential reporting form for certain SEC-registered investment advisers to private funds, including those that also are registered with the CFTC as commodity pool operators or commodity trading advisors. Form PF collects information designed to facilitate the Financial Stability Oversight Council's (FSOC) monitoring of systemic risk in the financial markets. The SEC and CFTC use the information collected on Form PF in their investor protection efforts.

"A key pillar of my agenda is restoring balance to disclosure obligations and reducing the cost of compliance wherever possible," said SEC Chairman Paul S. Atkins. "Prior amendments to Form PF have led to overly burdensome disclosure requirements for advisers, distracting them from their core investment functions, often without a commensurate benefit to regulators' use of the collected data. These proposed changes would help to rationalize the scope of Form PF requirements to support its purpose and bring our overall disclosure regime back into alignment."

"By raising the filing threshold and streamlining Form PF, we are taking steps to reduce the burdens associated with filing the form," said CFTC Chairman Michael S. Selig. "I look forward to reading the public comments to ensure we get these changes right so that we eliminate unnecessary costs and burdens for filers."

The proposed amendments would eliminate filing requirements for smaller advisers, who represent almost half of the advisers currently required to file Form PF, by raising the filing threshold from $150 million in private fund assets under management to $1 billion. The proposal would also raise the exposure reporting threshold for "large" hedge fund advisers from $1.5 billion in hedge fund assets under management to $10 billion. Form PF would continue to obtain information on over 90 percent of private fund gross assets and require detailed exposure information for funds managed by large hedge fund managers. In addition, the proposed amendments to Form PF would enable a method to identify funds that are active in the private credit market.

In addition to amending these thresholds, the proposal would eliminate or streamline many Form PF requirements, significantly reducing burdens for advisers required to file Form PF.

The proposal requests comments on all the proposed amendments.

The proposing release for the amendments will be published in the Federal Register, and the public comment period will remain open until 60 days after publication in the Federal Register.