Practical Impact on PE Sponsors of the Proposed Amendments to Form PF and Reasons for Industry Backlash (Part Two of Two)

The SEC issued proposed amendments to Form PF (Proposal) on January 26, 2022, that were met with substantial skepticism from the private funds industry. The concern is that the new disclosures and reporting prompted in the Proposal are inconsistent with the SEC’s purported interest in mitigating systemic risk, and instead serve to buttress the SEC’s examination efforts. Further, the one-business-day filings required if certain stress events occur would onerously burden fund managers, forcing them to direct administrative resources to the effort at the expense of monitoring other pressing compliance concerns. This two-part series examines the nuances of the Proposal and its practical impact on fund managers based on interviews with industry professionals. This second article highlights the individual SEC Commissioners’ remarks – including the vigorous dissent by Hester M. Peirce – on the Proposal, while also raising a number of ways the practical application of the Proposal would materially impact fund managers. The first article detailed the features of the Proposal that are relevant for PE sponsors and other closed-end managers. See “Report Describes the SEC’s Use of Form PF for Fund Manager Examination Targeting and Risk Management” (Oct. 10, 2014); and “SEC’s First Report on Initial Form PF Filings Offers Insight Into How the Agency Is Using the Collected Data for Examinations, Enforcement and Systemic Risk Monitoring” (Aug. 29, 2013).

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