With less data, new Form PF diminishes market insights (FundFire)

Still awaiting its final approval, the SEC’s amended Form PF Rule would require vastly fewer investment advisers to private funds to report their fund data. Originally viewed as needed compliance reporting following the 2008 financial crisis, Form PF was perceived as a way to gauge systemic risk tied to the accumulation of assets and trading in the private funds market. The current SEC administration’s view is that the original Form PF Rule’s filing requirements were too onerous for firms and should focus on the most pertinent data from the largest private funds. Under the amended Form PF, only private funds with at least $1 billion in assets under management have reporting requirements, whereas the previous threshold for reporting was $150 million. Amy Lynch, FrontLine’s Founder and President, explains that Form PF was always meant to be a primary mechanism of data collection for regulators to have more insight into market activity. The amended rule would change the event reporting requirement, such as sudden significant investment losses at a firm, by providing a full 72 hours to report the event instead of a more immediate reporting requirement. Ms. Lynch adds that a big test for the SEC’s new approach to Form PF reporting would be in the next financial downturn or extreme market shift. See FundFire (subscription required), “Only 200 ‘Large’ Hedge Funds to File New Form PF Under SEC Proposal”