The SEC and CFTC's proposal to amend Form PF filing requirements marks a major shift in private fund reporting since Dodd-Frank mandated these disclosures in 2010. If finalized, these changes will remove filing obligations for about half of current filers and reclassify two-thirds of "large" hedge funds as smaller entities.
For compliance officers at private fund advisers, this isn't just regulatory relief. It's a chance to reassess your entire compliance program. Here's how to prepare for what's next.
Preparing for Change
Before adjusting your compliance calendar or reallocating resources, gather these essentials:
Current State Documentation
- Your latest Form PF filing with complete asset calculations
- The methodology used for calculating regulatory assets under management (RAUM)
- Historical RAUM figures for the past eight quarters to identify trends
- Your fund structure chart showing all advised private funds
Regulatory Intelligence
- The proposed rule text and fact sheet from the SEC/CFTC joint release
- Your firm's comment letter, if submitted during the 60-day window
- Final rule adoption timeline (monitor SEC.gov for updates)
- Guidance from your outside counsel on threshold calculation edge cases
Team Capacity Baseline
- Hours spent on Form PF preparation, review, and filing
- External costs: legal review, consulting fees, audit support
- Systems and tools dedicated to Form PF data collection
Get sign-off from your CCO and CFO before reallocating compliance resources. Document the business case now while the proposal is pending.
Step-by-step Implementation
Phase 1: Determine Your New Filing Status
Calculate your position under the proposed thresholds:
For All Advisers:
- Current threshold: $150 million in private fund assets under management
- Proposed threshold: $1 billion
For Large Hedge Fund Advisers:
- Current threshold: $1.5 billion in hedge fund assets
- Proposed threshold: $10 billion
Use your RAUM calculation from the most recent filing. If you're within 20% of a threshold, model multiple scenarios. Asset growth, fund launches, and redemptions can push you across the line.
If your RAUM is $850 million today and you project 15% annual growth, you'll cross $1 billion within 18 months. Don't dismantle your Form PF infrastructure yet.
Phase 2: Map Compliance Program Impacts
For advisers dropping below the threshold:
Immediate Changes:
- Remove Form PF from your compliance calendar
- Update your written compliance policies to reflect the elimination of this filing obligation
- Notify your auditors that Form PF will no longer be part of your annual examination scope
- Archive your Form PF data collection systems (don't delete them yet)
Retained Obligations: You still file Form ADV. The proposed changes don't affect this requirement. Review Schedule D, Item 7.B.(1) to ensure your private fund reporting remains accurate.
Resource Reallocation: Quantify the hours freed up. If Form PF consumed 120 hours per quarter across your team, that's 480 hours annually. Document where you'll redirect that capacity: enhanced vendor due diligence, control testing, or regulatory change monitoring.
For large hedge funds reclassified as non-large:
Section 2b of Form PF requires quarterly reporting from large hedge funds. If you drop below the new $10 billion threshold, you'll shift to annual Section 1 reporting only.
Update Your Data Feeds: Section 2b requires granular position-level data. Section 1 doesn't. Work with your portfolio management and operations teams to identify which data pipelines you can retire or reduce in frequency.
Revise Your Timeline: Quarterly filing deadlines (60 days after quarter-end) become annual (120 days after fiscal year-end). Adjust your project plans and team schedules accordingly.
Phase 3: Preserve Institutional Knowledge
Even if you stop filing, preserve your Form PF methodology:
Create a runbook that documents:
- How you calculated RAUM (including which funds counted and which didn't)
- Data sources for each section you completed
- Validation steps and control points
- Contact lists for data owners across portfolio management, operations, and finance
If the SEC adjusts thresholds again or your AUM grows, you'll need to restart Form PF. Rebuilding from scratch is expensive. A 30-page runbook costs you a week now and saves you months later.
Validation: How to Verify It Works
After the final rule takes effect:
Confirm Your Filing Status in IARD: Log into the Investment Adviser Registration Depository and verify your Form ADV reflects your current RAUM. The system won't generate Form PF filing requirements if you're below the threshold, but confirm this explicitly with SEC staff if you're uncertain.
Test Your Compliance Calendar: Run a 12-month forward view. Form PF deadlines should be removed (or shifted to annual if you're still filing Section 1). If they're still there, you've got a process gap.
Audit Your Policies: Your compliance manual should no longer reference quarterly Form PF obligations if you've dropped below $1 billion. Have your CCO review the updated language before your next annual compliance review.
Verify Cost Savings: Three months after the rule takes effect, compare your compliance budget actuals to the prior year. You should see reduced legal fees, eliminated consulting costs, and redeployed internal hours. If you don't, investigate why the expected savings didn't materialize.
Maintenance and Ongoing Tasks
Monitor Your RAUM Quarterly: Even if you're not filing Form PF, track your RAUM every quarter. Set an alert at 80% of the $1 billion threshold. If you cross back over, you'll need 90 days to rebuild your filing capability before the first deadline.
Track Regulatory Amendments: The SEC and CFTC could adjust thresholds again. Subscribe to SEC rulemaking alerts and set a recurring task to review Form PF guidance annually.
Maintain Data Infrastructure: Keep your portfolio accounting and fund administration systems capable of producing Form PF data fields. Don't delete the report templates or data mappings. Archive them with a restore procedure.
Document Your Decision: If you stop filing, memorialize the decision in a compliance committee memo. Include the RAUM calculation, the regulatory citation, and the CCO's approval. Your next SEC examination will ask why you stopped filing. Have the answer ready.
The proposed amendments offer meaningful relief, but only if you execute the transition deliberately. Treat this like any other regulatory change: document your analysis, update your controls, and preserve the institutional knowledge you'll need if circumstances change.
