Feds Fish in Form PF

Securities and Derivative Litigation   |   Securities Transactions and Compliance   |   December 23, 2015
Download Download   
Share Share Page

Annual reports that the SEC must submit to Congress provide insight into how the agency is exploiting the wealth of information that private fund advisers are required to file with it on Form PF. The SEC developed Form PF over the past few years in response to requirements in the Dodd-Frank Act and other perceived regulatory imperatives.

The following are some uses, as described in the SEC’s August 2015 report, that may have the most direct impact on private fund advisers:

  • Prior to examining a private fund adviser, SEC staff generally review the adviser’s Form PF for any inconsistencies with other documents relating to the adviser, such as due diligence reports, pitch books, offering documents, operating agreements, books and records, the adviser’s Form ADV and related brochure, and other information provided to investors, “particularly with respect to holdings, leverage, liquidity, derivatives, and counterparties.”
  • Such discrepancies can result in further staff inquiries or deficiency letters, or enforcement actions.
  • The staff also uses a database containing certain information from Form PF to identify advisers engaging in activities implicating particular areas of examination focus, such as risk exposures, valuations, and high-frequency trading.
  • SEC enforcement personnel also have accessed Form PF data to assist their ongoing program to identify hedge fund advisers whose investment returns are aberrational relative to certain benchmarks and thus perhaps indicate improper conduct.
  • As part of its monitoring of risks in the money market fund industry, the staff is also monitoring Form PF data reported for private money market (“liquidity”) funds.

Multiple divisions, offices, and groups at the SEC are finding more ways to mine Form PF data to enhance the staff’s ability to identify legal violations. Private fund advisers must be mindful, therefore, that they live in a regulatory fishbowl that is growing more transparent all the time.

©2022 Carlton Fields, P.A. Carlton Fields practices law in California through Carlton Fields, LLP. Carlton Fields publications should not be construed as legal advice on any specific facts or circumstances. The contents are intended for general information and educational purposes only, and should not be relied on as if it were advice about a particular fact situation. The distribution of this publication is not intended to create, and receipt of it does not constitute, an attorney-client relationship with Carlton Fields. This publication may not be quoted or referred to in any other publication or proceeding without the prior written consent of the firm, to be given or withheld at our discretion. To request reprint permission for any of our publications, please use our Contact Us form via the link below. The views set forth herein are the personal views of the author and do not necessarily reflect those of the firm. This site may contain hypertext links to information created and maintained by other entities. Carlton Fields does not control or guarantee the accuracy or completeness of this outside information, nor is the inclusion of a link to be intended as an endorsement of those outside sites.

Subscribe to Publications


The information on this website is presented as a service for our clients and Internet users and is not intended to be legal advice, nor should you consider it as such. Although we welcome your inquiries, please keep in mind that merely contacting us will not establish an attorney-client relationship between us. Consequently, you should not convey any confidential information to us until a formal attorney-client relationship has been established. Please remember that electronic correspondence on the internet is not secure and that you should not include sensitive or confidential information in messages. With that in mind, we look forward to hearing from you.