Wednesday, May 30, 2012

SEC Approves FINRA Fee Schedule for Filing of Form PF by Hedge Fund and Private Fund Advisers


The SEC has approved FINRA filing fees for SEC-registered hedge fund advisers and other private fund advisers filing Form PF. Release No. IA-3305. Filing fees are charged for annual reports ($150) and quarterly reports ($150) to Form PF. Hedge fund and private fund advisers will file Form PF online through the Private Fund Reporting Depository (PRFD) System, which is a subsystem of the IARD system. No fee will be charged for filing an electronic amendment to Form PF, or for a transition to annual reporting filing.

Form PF is a two-tier scaled regime with enhanced reporting for larger funds based on an assets under management test. While Form PF is primarily intended to assist the Financial Stability Oversight Council in its monitoring obligations under the Dodd-Frank Act, the SEC may use information collected on Form PF in its regulatory programs, including examinations, investigations and investor protection efforts relating to private fund advisers.

Registered advisers managing hedge funds must submit information on Form PF regarding the financing and activities of these funds in Section 1 of the Form, and large hedge fund advisers are required to provide additional information in Section 2 of the Form.

Most private fund advisers required to file Form PF will only need to complete Section 1 of the Form. This section requires advisers to provide some basic information regarding any private funds they advise in addition to information about their private fund assets under management and their funds’ performance and use of leverage. However, larger private fund advisers must complete additional sections of Form PF, which require more detailed information.

Specifically, three types of large private fund advisers would be required to complete additional sections of Form PF. First, any adviser having at least $1.5 billion in regulatory assets under management attributable to hedge funds as of the end of any month in the prior fiscal quarter must complete Section 2 of Form PF. Second, any adviser managing a liquidity fund and having at least $1 billion in combined regulatory assets under management attributable to liquidity funds and registered money market funds as of the end of any month in the prior fiscal quarter must complete Section 3 of Form PF.  Third, any adviser having at least $2 billion in regulatory assets under management attributable to private equity funds as of the last day of the adviser’s most recently completed fiscal year must  complete Section  4 of Form PF.

The information each of these sections requires is tailored to the type of fund, focusing on relevant areas of financial activity that have the potential to raise systemic concerns.