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IAA Urges SEC To Reconsider One-Day Reporting for Private Fund Advisers

March 29, 2022

The IAA filed comments on March 21 on the SEC’s proposed amendments to Form PF, the confidential reporting form that private fund advisers are required to file with the SEC. Form PF was adopted under the Dodd-Frank Act to provide the SEC and Financial Stability Oversight Council (FSOC) with information to help monitor systemic risk. The proposed amendments would significantly broaden Form PF and (i) require one-business-day reporting of certain triggering events by private equity and large hedge fund advisers, (ii) decrease the reporting threshold for large private equity advisers, (iii) require all private equity advisers to provide additional information, and (iv) amend reporting requirements for liquidity funds.

The IAA supports the SEC’s efforts to monitor and assess for systemic risk and bolster investor protection. However, as we discuss in our letter, we urge the SEC to better balance any benefits of the new requirements with the business, operational, and compliance costs for advisers — especially for small advisers — in implementing a significant new private fund reporting requirement. We also ask the SEC to ensure robust controls around maintaining Form PF confidentiality to mitigate the risk of inadvertent disclosure of highly sensitive proprietary information. And we continue to be concerned about the short time period provided for comment, noting that we did not have sufficient time to conduct a full analysis with our members and provide a comprehensive response.

Our comments strongly oppose the proposed one-business-day reporting requirement for the proposed triggering events, which does not provide sufficient time for advisers and in our view is not needed to achieve the Commission’s goals. We recommend that the Commission allow up to five days for reporting of items it determines need to be reported on a “current” basis. We also recommend that the SEC modify some of the proposed reporting items and change the timeframe for reporting other information to an annual or quarterly basis. We also urge the SEC not to define “digital assets” in this proposal, but rather to coordinate with other federal regulators on a unified approach and request comments more holistically from all stakeholders. We request that the Commission reconsider the costs and burdens in its economic analysis and provide a minimum of an 18-month compliance period.

The IAA comment letter is available on the IAA website.

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