Form PF Compliance Amid Recent SEC Enforcement Actions and Upcoming Deadlines

Form PF and the General Instructions have undergone significant revisions in recent years. The most recent changes, finalized February 8, 2024, with a fast-approaching March 12, 2025 compliance date, introduced prescriptive filing requirements regarding the aggregation of private funds and other entities, with significant changes to the General Instructions and Form PF questions.[1] The February 8, 2024 amendments follow the SEC’s May 3, 2023 amendments, which marked the first major update to Form PF since its inception and significantly expanded private fund reporting obligations. The SEC’s recent enforcement actions and significant amendments to Form PF have heightened regulatory expectations for private fund advisers. With the March 12, 2025 compliance date fast approaching, private fund advisers must prioritize compliance and operational readiness to ensure timely and accurate reporting of Form PF.  

Form PF Filing Requirements and Recent Amendments

Form PF is mandatory for SEC-registered investment advisers managing private funds with at least $150 million in regulatory assets under management (RAUM). The filing requirements vary by private fund strategy and size. Form PF is filed electronically on a confidential basis through the Investment Adviser Registration Depository (IARD) system. Form PF consists of six sections, as outlined below:  

• Section 1: Required for private fund advisers meeting the $150 million RAUM threshold. This section covers information about the adviser and private funds (including fund “trading vehicles”) such as liquidity rights, asset values, performance, inflow and outflows. The instructions include newly-defined terms for “open-end private fund” and “closed-end private fund,” and Section 1 now includes “digital assets” and “litigation finance” as reportable strategies.
• Section 2: Required for large hedge fund advisers (managing $1.5 billion or more in hedge fund RAUM) for each qualifying hedge fund (i.e., hedge funds with a net asset value of at least $500 million). Master-feeder and parallel fund structures that collectively comprise qualifying hedge funds must report each component fund as provided in the updated instructions. This section covers the operations of qualifying hedge funds and their advisers including derivatives and counterparty exposure, financing activity, position reporting, side-pocket and investor liquidity information.
• Section 3: Required for large liquidity fund advisers (managing at least $1 billion in combined money market and liquidity fund assets under management). This section covers fund asset details, borrowing and financing arrangements, investor concentration and liquidity information.
• Section 4: Required for large private equity fund advisers (managing $2 billion or more in private equity RAUM) covering information on strategies, financing arrangements, and portfolio company exposure information.
• Section 5: This section is for “current reports” for large hedge fund advisers to qualifying hedge funds. Current reports – filed at the reporting fund level – must be made within 72 hours upon the occurrence of certain “operations events” related to “critical operations,” such as operational disruptions or significant degradation of fund functions, whether as a result of an event at the service provider, private fund or adviser level.
• Section 6: Required for large private equity fund advisers, requiring filings within 60 days of quarter-end after specific events (i.e., adviser-led secondary transactions, general partner removal, or termination of the investment period or of the fund).

The February 8, 2024 amendments introduced significant updates to the General Instructions to Form PF. The most significant change – as noted in the Form PF Section 2 description above – is the requirement to report each component fund of a master-feeder or parallel fund structure separately, with an exception for “disregarded feeder funds”. The amendments also require private fund advisers to identify and report “trading vehicles” associated with a reporting private fund – as noted in the Form PF Section 1 description above. The amendments further clarify the requirements for private fund investments in other private funds (“fund of funds”). The amendments now explicitly require private fund advisers to include the value of all private fund investments—whether internal or external—when determining filing Form PF filing thresholds, such as qualifying as a large hedge fund adviser, large liquidity fund adviser, or large private equity fund adviser, as well as whether a hedge fund is a qualifying hedge fund.

These updates are expected to increase filing burdens, especially for private fund advisers managing complex private fund structures and may necessitate adjustments to subscription agreements to obtain accurate investor classification information for Form PF reporting purposes. Annual Form PF filers submitting their Form PF before March 12, 2025 may file using the existing Form PF. However, annual filers submitting on or after March 12, 2025 must use the amended Form PF. Quarterly Form PF filers must use the amended Form PF for their Q1 2025 filing, due by May 30, 2025.[1]

Form PF Compliance and SEC Exam Preparedness

Private fund advisers face substantial operational challenges in adapting to the latest Form PF requirements. Failure to comply or provide accurate information on Form PF can result in enforcement actions, highlighting the need for robust internal controls. With the March 12, 2025 compliance date approaching, private fund advisers must update their processes to meet the new requirements. Key considerations include:

• Compliance Policies, Training, and Exam Readiness: Updating compliance policies and procedures with targeted training for legal, compliance, and operational teams. Ensuring comprehensive documentation of filing decisions, periodic internal audits, and robust controls to verify timely and accurate filings.
• Team Coordination and Reporting Workstreams: Compliance with Form PF requires seamless collaboration among internal and external stakeholders. Establish clear communication protocols, defined roles and responsibilities, and ensure that reporting workstreams are well-coordinated.
• Addressing Ambiguities: To reduce interpretation risk associated with Form PF reporting standards, carefully align reporting practices with the updated Form PF instructions and amendments. Engage experienced counsel to interpret the complexities of the revised requirements, ensuring full compliance and minimizing potential regulatory exposure.

The 2024 CrowdStrike outage underscored the importance of clear escalation protocols and readiness to act during off-hours, particularly for large hedge fund advisers with Form PF "operations event" reporting requirements.[2] On July 19, 2024, a software update error from cybersecurity firm CrowdStrike triggered a global IT outage, disrupting Microsoft Windows systems. This highlighted the reliance on a few software vendors as potential single points of failure. Private fund advisers should be prepared for similar disruptions. The SEC has stated that such events extend beyond business continuity activations and can include isolated disruptions to trading systems, pricing infrastructure, or key personnel.

Conclusion

The SEC’s recent enforcement actions and Form PF amendments signal heightened regulatory expectations for private fund advisers. With the compliance deadline approaching, private fund advisers must prioritize readiness, accurate reporting, and proactive engagement to meet regulatory challenges. Under SEC Chair Paul Atkins, the focus on private fund transparency and systemic risk is expected to continue. Private fund advisers are encouraged to contact Crowell & Moring LLP with any questions or to discuss this Client Alert.