The U.S. Securities and Exchange Commission (“SEC” and “Commission”) proposed new rules to increase hedge fund and private equity fund disclosures to increase oversight of the industry and to monitor systemic risks.
The proposal would require certain advisors to hedge funds and private equity funds to provide a current reporting of events that are relevant to financial stability and investor protection, including, but not limited to, extraordinary investment losses or significant margin and counterparty default events. The proposed amendments would require current reporting for large hedge fund advisors and advisors to private equity funds. These advisors would file reports within one business day of any event indicating significant stress that may harm investors or a broader risk issue. The proposed amendments would also provide the SEC and FSOC with more timely information to analyze and assess investor or market risk.
The proposal also would decrease the reporting threshold for large private equity advisors from $2 billion to $1.5 billion in private equity fund assets under management (“AUM”). That means those funds would report on the Form PF, and would include a significant portion of the industry.
Finally, the proposal will be published on SEC.gov and in the Federal Register, with public comment lasting 30 days after said publication. The proposed rules may be found at this link: Proposed rule: Amendments to Form PF to Require Current Reporting and Amend Reporting Requirements for Large Private Equity Advisers and Large Liquidity Fund Advisers (sec.gov).