SEC inspectors digging into Form PF data

While Form PF submissions were ostensibly required for systemic risk monitoring purposes, the US Securities and Exchange Commission (SEC) made clear that the forms were a significant aid in examining registered private fund advisers.

As part of an annual update on Form PF information gathering to Congress, the SEC verified that the filings were being shared with its Office of Compliance Inspections and Examinations (OCIE), the Division of Economic and Risk Analysis (DERA), its Asset Management Unit (AMU) dedicated to private fund enforcement matters and other offices.

“Prior to an examination of a private fund adviser that files Form PF, OCIE staff generally reviews the adviser’s Form PF filing as a part of a routine pre-examination evaluation,” the report said.

Inspectors are combing the forms for any inconsistencies with other regulatory filings such as the Form ADV and brochure, as well as due diligence reports, pitch books, offering documents and operating agreements.

Most GPs file the form once a year, providing basic details on their fund’s size, leverage, types of investors, liquidity and performance. Larger GPs must file the form quarterly and include additional disclosures.

Inspectors are reviewing Form PF filings to see that the disclosures made to regulators are identical to the ones being made to investors, “particularly with respect to holdings, leverage, liquidity, derivatives and counterparties,” the report said.

In all, Form PF was filed by 2,661 private fund advisers, representing 21,542 funds and nearly $9 trillion in assets. Of those funds, 33 percent were private equity while 6 percent were real estate.