Executive Summary

Event Reporting and Other May 2023 Changes

In May 2023, the U.S. Securities and Exchange Commission published final rules and rule amendments for Form PF to require event reporting if certain events occur and to require private equity fund advisers to provide additional information in their regular Form PF filings.

Large hedge fund advisers are required to complete and file the new Section 5 of Form PF if any of the following occurs with respect to any qualifying hedge fund that it advises:

Extraordinary investment losses;
Significant margin, collateral or equivalent increases;
Receipt of notice of margin default or a determination of the qualifying hedge fund’s inability to meet a call for margin, collateral or equivalents;
A counterparty defaults;
A prime broker relationship is terminated or materially restricted;
A significant disruption or degradation of the qualifying hedge fund’s critical operations;
Significant cumulative calls for withdrawals and redemptions; or
Inablility to pay redemption requests or suspension of redemptions.

If one of these events occurs, the large hedge fund adviser must file the Section 5 of Form PF with the SEC as soon as practicable, but no later than 72 hours after the occurrence of the event.

Separately, private equity fund advisers are required to file a quarterly event report as set out in Section 6 of the Form PF if with respect to any private equity fund it advises:

The reporting fund closes an adviser-led secondary transaction; or
The investors of the reporting fund, in accordance with the requirements of the reporting fund’s governing documents, elect to:
- Remove the general partner;
- Terminate the reporting fund’s investment period; or
- Terminate the reporting fund.

Private equity event reports are due within 60 calendar days following the end of the calendar quarter in which the reportable event occurred, provided the event occurred on or after the compliance date.

In addition to the new event reporting requirements, the SEC has amended Section 4 of the Form PF to require private equity fund advisers to provide certain additional information.

A full summary of the applicable requirements can be accessed here.

Large liquidity fund advisers

Although the proposing release included proposals regarding Section 3 of Form PF affecting large liquidity fund advisers, the May 2023 adopting release did not bring those proposals forward. The SEC instead chose to delay finalization of the Section 3 requirements until the money market reform package was finalized. That finalization occurred on July 12, 2023 and the final Section 3 requirements for large liquidity fund advisers on Form PF were included in the adopting release for the money marlet reform package.

The Joint Data Proposals

In August 2022, the SEC (in conjunction with the U.S. Commodity Futures Trading Commission ("CFTC")) published a second set of proposed changes to the Form PF covering the parts of the Form PF that are the joint jurisdiction of the SEC and the CFTC. The August Proposals contain sweeping changes to the provisions related to:

Treatment of master feeder funds;
Look throughs, aggregation and definitions with specific look through requirements;
Fund performance reporting;
Counterparty and creditor disclosures for all funds other than qualifying hedge funds;
Disclosure of the monthly aggregate reporting fund exposures (long and short) by sub-asset class;
Currency exposure;
Netted exposures;
Detailed reporting regarding reference assets;
Counterparty and creditor disclosures for qualifying hedge funds;
Portfolio correlation and volatility calculations; and
Monthly and quarterly performance reporting.

If you would like to read more about the requirements under this proposal, you can access our August 23, 2022 summary of the joint data proposal.

Please contact Jennifer Wood with any questions regarding these new requirements or the pending joint data proposals.

Jennifer Wood

Managing Director, Global Head of Asset Management Regulation & Sound Practices

Timeline

AIMA has categorized these proposals as High Priority/Medium Impact and they are therefore represented in bright pink in the AIMA Regulatory Horizon Scan gantt chart.

**Key Dates**
Estimated Compliance Date for Joint Data³	October 10, 2024	New
Effective/Compliance Date for Section 3 changes and May 2023 changes other than Sections 5 & 6	June 11, 2024
Effective/Compliance Date for Event Reporting Sections 5 & 6	December 11, 2023
Estimated Adoption Date for Joint Data^1,2	October 11, 2023	New
Launch of Event Reporting Implementation Guide	September 13, 2023
Final Section 3 reporting requirements for large liquidity fund advisers published	July 12, 2023
Federal Register version of event reporting requirements published	June 12, 2023
Final event reporting requirements published	May 3, 2023
Comment deadline for joint data proposal	October 11, 2022
AIMA/ACC response to joint data proposal filed	October 11, 2022
Joint trades request for extension of joint data proposal submitted	September 14, 2022
AIMA/ACC summary of joint data proposal	August 23, 2022
Joint data proposal published by SEC/CFTC	August 10, 2022
Comment deadline for current reporting proposal	March 21, 2022
AIMA/ACC response to current reporting proposal filed	March 21, 2022
Joint trades request for extension of current reporting proposal submitted	March 1, 2022
AIMA/ACC summary of current reporting proposal	February 4, 2022
Current reporting proposal published by SEC (which included changes affecting large liquiidty fund advisers)	January 26, 2022

¹ Subject to change. We have estimated an adoption date based on the number of outstanding Division of Investment Management proposals scheduled for completion in the second half of 2023 according to the SEC's Spring 2023 Regulatory Flexibility Agenda. As the weeks pass, these dates will shift and become more compressed until either the year end has passed or new information becomes available. Of course, this is only an estimate and may move forward or backward as actual matters develop depending on the priorities of the SEC and CFTC. These estimates have been provided solely to allow people to visualize the potential overlaps in compliance burdens for multiple pending rules at the same time.

² Subject to change. The effective date for the joint data final rules has been estimated as the same day as publication since this was the method chosen for the event reporting requirements and the more recently published private fund adviser rules.

³ Subject to change. We have estimated a compliance period of one year although the joint data proposal is silent on the question of compliance periods.

Implementation Guide

AIMA in conjunction with Citco and K&L Gates LLP has prepared the Form PF Event Reporting Implementation Guide

The Guide discusses the new Form PF event reporting requirements, key questions and challenges as well as advance planning that members can perform prior to the implementation of these requirements, effective on December 11, 2023.

This new reporting poses significant challenges to the industry and its members, with a short reporting timeframe and introduction of new reporting concepts. The aim of this Guide is to explain the key concepts in detail from those impacting large hedge fund advisers to those for private equity and liquidity fund advisers.

Click HERE to access the guide.

Replays

Launch of AIMA's Form PF Implementation Guide
Date: 13 September 2023
Time: 10:00AM - 11:00AM EDT

The SEC’s Form PF Rule 360: Round 1: “Current Reporting”

Date: 01 June 2023
Time: 10:00AM - 11:00AM EDT A replay of the webinar exploring the what is required under the new event reporting requirements can be accessed here.