SEC Approves Confidential Private Fund Risk Reporting

October 26, 2011

The SEC adopted a new rule requiring certain advisers to hedge funds and other private funds to report information for use by the Financial Stability Oversight Council (FSOC) in monitoring risks to the U.S. financial system.  The rule, which implements Sections 404 and 406 of the Dodd-Frank Wall Street Reform and Consumer Protection Act, requires SEC-registered investment advisers with at least $150 million in private fund assets under management to periodically file a new reporting form (Form PF). Information reported on Form PF will remain confidential.


The reporting scheme divides private fund advisers by size into two broad groups – large advisers and small advisers. The amount of information reported and the frequency of reporting depends on the group to which the adviser belongs.  The SEC anticipates that most private fund advisers will be regarded as small private fund advisers, but that the relatively limited number of large advisers providing more detailed information will represent a substantial portion of industry assets under management. As a result, these thresholds will allow FSOC to monitor a significant portion of private fund assets while reducing the reporting burden for private fund advisers.

There will be a two-stage phase-in period for compliance with Form PF filing requirements. Most private fund advisers will be required to begin filing Form PF following the end of their first fiscal year or fiscal quarter, as applicable, to end on or after Dec. 15, 2012. Those with $5 billion or more in private fund assets 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.

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Investment Advisers, Regulatory