Form PF - Summary and New STP Service
January 14, 2013
NEW YORK- Title IV of the Dodd-Frank Wall Street Reform and Consumer Protection Act has resulted in the Commodity Futures Trading Commission (CFTC) and the Securities and Exchange Commission (SEC) enforcing a new rule, that requires SEC registered investment advisers which are advising one or more private funds having regulatory assets under management at $150 million or greater to file Form PF. Form PF is to be filed confidentially, and electronically, as its information is intended to help gauge the extent to which private funds may contribute to potential systemic risk of the United States financial system for the Financial Stability Oversight Council (FSOC). This information is supposed to be a complement to Form ADV information, disclosing private funds strategies and operations in order for appropriate authorities to be able to view the possible particular risks that may be associated with these types of investment firms. The FSOC is actually the primary regulator of these private funds advisors.
Form PF will aid the FSOC in refining how it will assess the potential systemic risk it attempts to identify. More stringent regulation may result from the information submitted on Form PF, which underscores how critical this added filing requirement is, and this information can be used in an examination by the SEC and/or CFTC. Questions under section 1 of Form PF include whether there is use of a strategy that may employ leverage. Additional sections of Form PF must be completed by “Larger Private Funds” if there are at least $1.5 billion of regulatory assets under management in hedge funds (which may include performance fees, or short selling), at least $1 billion of regulatory assets under management in liquidity funds (“short term obligations” intended to provide stable net asset value), or at least $2 billion of regulatory assets under management in private equity funds (which do not have “ordinary redemption” privileges) as of the end of specified periods.
Filings of Form PF for most SEC registered investment advisers which are advising one or more private funds having regulatory assets under management at $150 million or greater will be required annually, while “Larger Private Funds” will be required to file Form PF quarterly.
STP Investment Services now offers a Form PF service and is an excellent way to start a relationship with us.