On October 26, 2011, the Securities and Exchange Commission ("SEC") announced the adoption of Form PF, which stands for "Private Fund." Required by the Dodd Frank Wall Street Reform and Consumer Protection Act, the adoption of the form seeks to require reporting by larger hedge fund and venture capital private advisers in an effort to assess systemic risks.
The minimum amount of assets under management before the reporting requirement is triggered is $150 million, meaning that smaller private fund advisers are not required to file Form PF at all. Once this threshold is reached, however, there is a tiered reporting requirement base on the level of assets under management within different categories as established by the form. The exclusion for the smaller advisers is justified because their funds have a minimal impact on a broad based systemic risk analysis, according to a statement by SEC Chairman Mary Shapiro delivered in connection with the adoption of the form.
Although the group of large advisers required to file Form PF is relatively small in number, that group represents a high percentage of the total assets under management by private funds generally throughout the country. In announcing the form's adoption, for example, Ms. Shapiro stated that the new rule requires heightened reporting from hedge fund advisers who manage at least $1.5 million in hedge fund assets, a requirement that applies to only about 230 domestic hedge fund advisers. Those 230 advisers, however, manage more than an estimated 80% of all assets under management.
Similarly, SEC staff anticipates that approximately 155 domestic private equity fund advisers would be subject to the form-filing requirement. Those advisers are expected to manage approximately $2 billion in private equity funds, which is approximately 75% of the private equity market.