Form PF; Reporting Requirements for All Filers and Large Hedge Fund Advisers

<RULE> COMMODITY FUTURES TRADING COMMISSION <CFR>17 CFR Chapter I</CFR> <RIN>RIN 3038-AF31</RIN> SECURITIES AND EXCHANGE COMMISSION <CFR>17 CFR Parts 275 and 279</CFR> <DEPDOC>[Release No. IA-6546; File No. S7-22-22]</DEPDOC> <RIN>RIN 3235-AN13</RIN> <SUBJECT>Form PF; Reporting Requirements for All Filers and Large Hedge Fund Advisers</SUBJECT> <HD SOURCE="HED">AGENCY: </HD> Commodity Futures Trading Commission and Securities and Exchange Commission. <HD SOURCE="HED">ACTION:</HD> Joint final rule. <SUM> <HD SOURCE="HED">SUMMARY:</HD> The Commodity Futures Trading Commission (“CFTC”) and the Securities and Exchange Commission (“SEC”) (collectively, “we” or “Commissions”) are adopting amendments to 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 a commodity pool operator (“CPO”) or commodity trading adviser (“CTA”). The amendments are designed to enhance the Financial Stability Oversight Council's (“FSOC's”) ability to monitor systemic risk as well as bolster the SEC's regulatory oversight of private fund advisers and investor protection efforts. In connection with the amendments to Form PF, the SEC is amending a rule under the Investment Advisers Act of 1940 (“Advisers Act”) to revise instructions for requesting a temporary hardship exemption. </SUM> <EFFDATE> <HD SOURCE="HED">DATES:</HD> <E T="03">Effective date:</E> This rule is effective March 12, 2025. <E T="03">Compliance date:</E> See section II.F of this final rule. </EFFDATE> <FURINF> <HD SOURCE="HED">FOR FURTHER INFORMATION CONTACT:</HD> <E T="03">CFTC:</E> Pamela Geraghty, Acting Deputy Director; Michael Ehrstein, Special Counsel; Elizabeth Groover, Special Counsel; or Andrew Ruggiero, Special Counsel, at (202) 418-6700, Commodity Futures Trading Commission, Three Lafayette Centre, 1155 21st Street NW, Washington, DC 20581. <E T="03">SEC:</E> Neema Nassiri, Jill Pritzker, Senior Counsels; Tom Strumpf, Branch Chief; or Melissa Roverts Harke, Assistant Director, at (202) 551-6787 or <E T="03">IArules@sec.gov,</E> Investment Adviser Regulation Office, Division of Investment Management, Securities and Exchange Commission, 100 F Street NE, Washington, DC 20549-8549. </FURINF> <SUPLINF> <HD SOURCE="HED">SUPPLEMENTARY INFORMATION:</HD> The Commissions are adopting amendments to Form PF [17 CFR 279.9] under the Advisers Act, and the SEC is adopting amendments to 17 CFR 275.204(b)-1 under the Advisers Act. <SU>1</SU> <FTREF/> <FTNT> <SU>1</SU>  15 U.S.C. 80b. Unless otherwise noted, when we refer to the Advisers Act, or any section of the Advisers Act, we are referring to 15 U.S.C. 80b, at which the Advisers Act is codified, and when we refer to rules under the Advisers Act, or any section of these rules, we are referring to title 17, part 275 of the Code of Federal Regulations [17 CFR 275], in which these rules are published. <SU>2</SU>  Congress enacted Sections 404 and 406 of the Dodd-Frank Act, which required that private fund advisers file reports and specified certain types of information that should be subject to reporting and/or recordkeeping requirements. With respect to such reports, the Dodd-Frank Act authorized the SEC to require that private fund advisers file such information “as necessary and appropriate in the public interest and for the protection of investors, or for the assessment of systemic risk.” The result of this enactment was Form PF, which is a joint form between the SEC and CFTC only with respect to sections 1 and 2 of the Form. </FTNT> <GPOTABLE COLS="3" OPTS="L2,tp0,i1" CDEF="s50,r50,r50"> <TTITLE> </TTITLE> <CHED H="1">Agency</CHED> <CHED H="1">Reference</CHED> <CHED H="1">CFR citation</CHED> <ROW> <ENT I="01">CFTC & SEC</ENT> <ENT>17 CFR 279.9.</ENT> </ROW> <ROW> <ENT I="01">SEC</ENT> <ENT>Rule 204(b)-1</ENT> <ENT>17 CFR 275.204(b)-1.</ENT> </ROW> </GPOTABLE> <EXTRACT> <FP SOURCE="FP-2">I. Introduction</FP> <FP SOURCE="FP-2">II. Discussion</FP> <FP SOURCE="FP1-2">A. Amendments to the General Instructions</FP> <FP SOURCE="FP1-2">1. Reporting Master-Feeder Arrangements and Parallel Fund Structures</FP> <FP SOURCE="FP1-2">2. Reporting Private Funds That Invest in Other Funds</FP> <FP SOURCE="FP1-2">3. Reporting Timelines</FP> <FP SOURCE="FP1-2">B. Amendments Concerning Basic Information About the Adviser and the Private Funds It Advises</FP> <FP SOURCE="FP1-2">1. Amendments to Section 1a of Form PF—Identifying Information</FP> <FP SOURCE="FP1-2">2. Amendments to Section 1b of Form PF—Concerning All Private Funds</FP> <FP SOURCE="FP1-2">3. Amendments to Section 1c of Form PF—Concerning All Hedge Funds</FP> <FP SOURCE="FP1-2">C. Amendments Concerning Information About Hedge Funds Advised by Large Private Fund Advisers</FP> <FP SOURCE="FP1-2">1. Removal of Existing Section 2a</FP> <FP SOURCE="FP1-2">2. Amendments to Section 2</FP> <FP SOURCE="FP1-2">D. Amendments To Enhance Data Quality</FP> <FP SOURCE="FP1-2">E. Additional Amendments</FP> <FP SOURCE="FP1-2">F. Effective and Compliance Dates</FP> <FP SOURCE="FP-2">III. Other Matters</FP> <FP SOURCE="FP-2">IV. Economic Analysis</FP> <FP SOURCE="FP1-2">A. Introduction</FP> <FP SOURCE="FP1-2">B. Economic Baseline and Affected Parties</FP> <FP SOURCE="FP1-2">1. Economic Baseline</FP> <FP SOURCE="FP1-2">2. Affected Parties</FP> <FP SOURCE="FP1-2">C. Benefits, Costs, and Effects on Efficiency, Competition, and Capital Formation</FP> <FP SOURCE="FP1-2">1. Benefits</FP> <FP SOURCE="FP1-2">2. Costs</FP> <FP SOURCE="FP1-2">D. Reasonable Alternatives</FP> <FP SOURCE="FP1-2">1. Alternatives to Amendments to General Instructions, Amendments To Enhance Data Quality, and Additional Amendments</FP> <FP SOURCE="FP1-2">2. Alternatives to Amendments to Basic Information About the Adviser and the Private Funds It Advises</FP> <FP SOURCE="FP1-2">3. Alternatives to Amendments to Information About Hedge Funds Advised by Large Private Fund Advisers</FP> <FP SOURCE="FP1-2">4. Alternatives to the Definition of the Term “Hedge Fund”</FP> <FP SOURCE="FP-2">V. Paperwork Reduction Act</FP> <FP SOURCE="FP1-2">A. Purpose and Use of the Information Collection</FP> <FP SOURCE="FP1-2">B. Confidentiality</FP> <FP SOURCE="FP1-2">C. Burden Estimates</FP> <FP SOURCE="FP-2">VI. Regulatory Flexibility Act Certification</FP> <FP SOURCE="FP-2">Statutory Authority</FP> </EXTRACT> <HD SOURCE="HD1">I. Introduction</HD> The Commissions are adopting amendments to sections of Form PF, the form that certain SEC-registered investment advisers, including those that also are registered with the CFTC as a CPO or CTA, use to report confidential information about the private funds that they advise. <SU>3</SU> <FTREF/> Form PF provides the Commissions and FSOC with important information about the basic operations and strategies of private funds and has helped establish a baseline picture of the private fund industry for use in assessing systemic risk. We now have more than a decade of experience analyzing the information collected on Form PF. <SU>4</SU> <FTREF/> In that time, the private fund industry has grown in size and evolved in terms of business practices, complexity of fund structures, and investment strategies and exposures. <SU>5</SU> <FTREF/> Based on this experience and in light of these changes, the Commissions and FSOC have identified significant information gaps and situations where revised information would improve the Commissions' and FSOC's understanding of the private fund industry and the potential systemic risk posed by it, as well as further investor protection efforts. Accordingly, to enhance FSOC's monitoring and assessment of systemic risk and to collect additional data and make data more useful for the Commissions' use in their respective regulatory programs, <SU>6</SU> <FTREF/> in August 2022, the Commissions proposed amendments to enhance the information advisers file on Form PF and improve data quality. <SU>7</SU> <FTREF/> <FTNT> <SU>3</SU>   <E T="03">See</E> 17 CFR 275.204(b)-1. Advisers Act section 202(a)(29) defines the term “private fund” as an issuer that would be an investment company, as defined in section 3 of the Investment Company Act of 1940 (“Investment Company Act”), but for section 3(c)(1) or 3(c)(7) of that Act. Section 3(c)(1) of the Investment Company Act provides an exclusion from the definition of “investment company” for any issuer whose outstanding securities (other than short-term paper) are beneficially owned by not more than one hundred persons (or, in the case of a qualifying venture capital fund, 250 persons) and which is not making and does not presently propose to make a public offering of its securities. Section 3(c)(7) of the Investment Company Act provides an exclusion from the definition of “investment company” for any issuer, the outstanding securities of which are owned exclusively by persons who, at the time of acquisition of such securities, are qualified purchasers, and which is not making and does not at that time propose to make a public offering of such securities. The term “qualified purchaser” is defined in section 2(a)(51) of the Investment Company Act. Any reference to the “Commissions” or “we,” as it relates to the collection and use of Form PF data, are meant to refer to the agencies in their separate or collective capacities (as the context requires or permits), and such data from filings made pursuant to 17 CFR 275.204(b)-1, by and through Private Fund Reporting Depository, a subsystem of the Investment Adviser Registration Depository (“IARD”), and reports, analysis, and memoranda produced pursuant thereto. </FTNT> <FTNT> <SU>4</SU>  Form PF was adopted in 2011 as required by the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (“Dodd-Frank Act”). Public ━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━ Preview showing 10k of 674k characters. Full document text is stored and available for version comparison. ━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━