US financial watchdogs have put forward changes aimed at reducing reporting demands on private fund advisers, while keeping what they describe as necessary and appropriate information.
In a joint proposal, the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) outlined amendments to Form PF, a confidential reporting form for certain SEC-registered investment advisers to private funds.
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The scope also covers advisers that are registered with the CFTC as commodity pool operators or commodity trading advisors.
Form PF is designed to help the Financial Stability Oversight Council (FSOC) monitor systemic risk in financial markets. The SEC and CFTC also use the data for investor protection work.
A central change would be to remove the filing requirement for smaller advisers. The agencies propose raising the reporting threshold from $150m in private fund assets under management to $1bn.
According to the agencies, these smaller advisers represent almost half of the firms currently required to file Form PF.
The proposal would also lift the exposure reporting threshold for large hedge fund advisers. This level would rise from $1.5bn in hedge fund assets under management to $10bn.
The regulators said Form PF would still capture information on more than 90% of private fund gross assets. It would also continue to require detailed exposure reporting for funds managed by large hedge fund managers.
The changes would also introduce a method to identify funds that are active in the private credit market.
Alongside the threshold adjustments, the proposal would remove or streamline a range of Form PF requirements, which the agencies said would “significantly” reduce burdens for advisers that still have to file.
SEC chairman Paul Atkins said: “A key pillar of my agenda is restoring balance to disclosure obligations and reducing the cost of compliance wherever possible.
“Prior amendments to Form PF have led to overly burdensome disclosure requirements for advisers, distracting them from their core investment functions, often without a commensurate benefit to regulators’ use of the collected data. These proposed changes would help to rationalize the scope of Form PF requirements to support its purpose and bring our overall disclosure regime back into alignment.”
The SEC and CFTC have asked for comments on all parts of the proposal.
CFTC chairman Michael Selig said: “I look forward to reading the public comments to ensure we get these changes right so that we eliminate unnecessary costs and burdens for filers.”
