AppId is over the quota
The Securities and Exchange Commission approved Wednesday the adoption of a new rules requiring private funds to report details of about how they borrow and invest.
Specifically due to the Dodd-Frank Act, registered investment advisers with at least $150 million in private fund assets under management must periodically file reports on what is known as Form PF with regulators starting next year, according to various reports.
Also the advisers are broken up into two categories – “large” and “small” - with large being $1.5 billion and above, while smaller funds are below $1.5 billion.
The new rules are considered historic since private funds including hedge funds, private-equity funds and other types of pooled investment vehicles in the past did not have to register with the SEC.
However, the hedge fund industry fought for and won some concessions.
Those hedge funds that meet the $1.5 billion in assets threshold would have to provide the most in-depth reporting of information, instead of the $1 billion mark originally proposed.
Some other concessions include filings to be done 60 days after the end of a fiscal quarter, instead of the originally proposed 15 days after a quarter’s end and hedge funds will not have to report on individual holdings in their portfolio but instead aggregate holdings.
But the rule does not go into effect immediately as the Commodity Futures Trading Commission has to approve the rule, which may happen sometime next week.
Those involved in the investment world weighed in on the adoption of the Form PF regulation.
Kevin Duffy, a former SEC staff attorney who oversees the regulatory and compliance practice at financial advisory firm Kinetic Partners saw the pros and cons of the new rule in an interview with Hedgefund.net.
Duffy said the change for filings from 15 days to 60 days was “pretty reasonable.” Yet, he thought Form PF should not be about one form fits all funds but instead should be different forms for different funds.
He also said he wouldn’t be surprised if some money managers would seek legal action to overturn the new rules, pointing out that a lawsuit brought by a hedge fund was successful in stopping the SEC from imposing rules to get hedge funds to register.
At the same time, Duffy offered a caveat.
“If someone is going to bring legal action, they have to look and see if it is financially worth it,” Duffy said.
Go to New York Times article
Go to Wall Street Journal
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