Fewer private fund managers will have to report to U.S. regulators under joint proposals from the U.S. Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC), which seek to cut requirements on smaller firms.
The SEC and CFTC proposed revisions to the private fund reporting requirements (under Form PF) that would, among other things, raise the asset thresholds for firms that have reporting obligations.
Under the proposals, the filing trigger would be increased to US$1 billion in private fund assets under management (AUM) from US$150 million. The asset threshold to trigger the “large” hedge fund reporting requirements would also jump to US$10 billion from US$1.5 billion.
The regulators said that the proposed changes would reduce the number of small firms that have to meet these reporting obligations, while still collecting data from larger firms that account for over 90% of AUM — a change that aims to reduce the regulatory burden on a large number of firms, while maintaining regulatory oversight for the bulk of private fund assets.
Additionally, the proposals seek to streamline the reporting requirements — including revisions to eliminate certain requirements, simplifying the reporting of large hedge fund counterparty exposures, and ending quarterly event reporting.
The proposals come in the wake of changes adopted in 2024, which were designed to expand private funds’ reporting requirements. However, amid industry pushback, and a change in leadership at the SEC and CFTC, the compliance date for the increased reporting demands was pushed back to Oct. 1 to give the regulators time to reconsider these requirements.
“A key pillar of my agenda is restoring balance to disclosure obligations and reducing the cost of compliance wherever possible,” said SEC chairman, Paul Atkins, in a release accompanying the proposals.
“Prior amendments to Form PF have led to overly burdensome disclosure requirements for advisers, distracting them from their core investment functions, often without a commensurate benefit to regulators’ use of the collected data,” he added. “These proposed changes would help to rationalize the scope of Form PF requirements to support its purpose and bring our overall disclosure regime back into alignment.”
These latest proposals will be out for a 60-day comment period after they are published in the Federal Register.