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COMMODITY FUTURES TRADING COMMISSION

17 CFR Part 4

RIN 3038-AF68

SECURITIES AND EXCHANGE COMMISSION

17 CFR Parts 275 and 279

Release No. IA-6959; File No. S7-2026-13

RIN 3235-AN64

Form PF; Reporting Requirements for All Filers

AGENCIES: Commodity Futures Trading Commission and Securities and Exchange Commission.

ACTION: Joint proposed rules.

SUMMARY: The Commodity Futures Trading Commission (the “CFTC”) and the Securities and

Exchange Commission (the “SEC”) (collectively, “we” or the “Commissions”) are proposing to

amend Form PF, the confidential reporting form for certain SEC-registered investment advisers to

private funds, including those that also are registered with the CFTC as a commodity pool operator (a

“CPO”) or a commodity trading advisor (a “CTA”). The proposed amendments would eliminate

certain filing and reporting obligations, streamline certain requirements, and make corrections and

other revisions. The proposed amendments are designed to eliminate certain burdens, among other

things.

DATES: This proposal was published in the Federal Register on April 24, 2026. Comments should

be received on or before June 23, 2026.

ADDRESSES: Comments may be submitted by any of the following methods.

CFTC: Comments may be submitted to the CFTC by any of the following methods.

•

CFTC Comments portal: https://comments.cftc.gov. Follow the instructions for

submitting comments through the website.

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•

Mail: Christopher Kirkpatrick, Secretary of the Commission, Commodity Futures Trading

Commission, Three Lafayette Centre, 1155 21st Street, NW, Washington, DC 20581.

•

Hand Delivery/Courier: Follow the same instructions as for Mail above.

Please submit your comments using only one method. To avoid possible delays with mail or

in-person deliveries, submissions through the CFTC website are encouraged. “Form PF” must be in

the subject field of comments submitted via email, and clearly indicated on written submissions. All

comments must be submitted in English, or if not, accompanied by an English translation. Comments

will be posted as received to www.cftc.gov. You should submit only information that you wish to

make available publicly. If you wish the CFTC to consider information that may be exempt from

disclosure under the Freedom of Information Act, a petition for confidential treatment of the exempt

information may be submitted according to the established procedures in 17 CFR 145.9.

The CFTC reserves the right, but shall have no obligation, to review, prescreen, filter, redact,

refuse, or remove any or all of your submission from www.cftc.gov that it may deem to be

inappropriate for publication, including, but not limited to, obscene language. All submissions that

have been redacted or removed that contain comments on the merits of the rulemaking will be

retained in the public comment file and will be considered as required under the Administrative

Procedure Act and other applicable laws, and may be accessible under the Freedom of Information

Act, 5 U.S.C. 552, et seq. (“FOIA”).

SEC: Comments may be submitted by any of the following methods:

Electronic Comments:

•

Use the Commission’s internet comment form (https://www.sec.gov/comments/s7-202613/form-pf-reporting-requirements-all-filers); or

•

Send an email to rule-comments@sec.gov. Please include File Number S7-2026-13 on the

subject line.

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Paper Comments:

•

Send paper comments to Secretary, Securities and Exchange Commission, 100 F Street NE,

Washington, DC 20549-1090.

All submissions should refer to File Number S7-2026-13. This file number should be included

on the subject line if email is used. To help the Commission process and review your comments more

efficiently, please use only one method of submission. The Commission will post all comments on

the Commission’s website (https://www.sec.gov/rules-regulations/rulemaking-activity). Do not

include personal identifiable information in submissions; you should submit only information that

you wish to make available publicly. We may redact in part or withhold entirely from publication

submitted material that is obscene or subject to copyright protection.

Studies, memoranda, or other substantive items may be added by the Commission or staff to

the comment file during this rulemaking. A notification of the inclusion in the comment file of any

such materials will be made available on the Commission’s website. To ensure direct electronic

receipt of such notifications, sign up through the “Stay Connected” option at www.sec.gov to receive

notifications by email.

A summary of the proposal of not more than 100 words is posted on the Commission’s

website (https://www.sec.gov/rules-regulations/2026/04/s7-2026-13).

FOR FURTHER INFORMATION CONTACT: CFTC: Michael Ehrstein or Elizabeth

Groover, Special Counsels, at (202) 418-6700, Commodity Futures Trading Commission, Three

Lafayette Centre, 1155 21st Street, NW Washington, DC 20581. SEC: Alexis Palascak, Janet Jun, and

Daniel Levine, Senior Counsels; Adele Kittredge Murray, Private Funds Attorney Fellow; or Robert

Holowka, Acting Assistant Director, Investment Adviser Regulation Office, at (202) 551-6787,

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Division of Investment Management, Securities and Exchange Commission, 100 F Street NE,

Washington, DC 20549-8549.

SUPPLEMENTARY INFORMATION: The CFTC and SEC are requesting public comment

on the following under the Investment Advisers Act of 1940 [15 U.S.C. 80b] (“Advisers Act”). 1

Agency

Reference

CFR Citation

CFTC & SEC

Form PF

17 CFR 279.9

SEC

Rule 204(b)-1

17 CFR 275.204(b)-1

TABLE OF CONTENTS

INTRODUCTION ................................................................................................................ 6

II.

DISCUSSION ..................................................................................................................... 14

Increase the Filing Threshold for All Form PF Filers .................................................. 14

Increase the Reporting Threshold for Large Hedge Fund Advisers ............................. 19

Disregarded Feeder Funds ............................................................................................ 27

Eliminate the Look Through Requirement ................................................................... 32

Trading Vehicles........................................................................................................... 38

Eliminate Form PF Question 23(c) Volatility Reporting ............................................. 43

Eliminate Certain Trading and Clearing Reporting ...................................................... 45

Eliminate Form PF Question 32(b)(2) Adjusted Exposure Reporting Based on

Internal Methodology ................................................................................................... 48

Eliminate Form PF Question 34 Monthly Asset Turnover Reporting.......................... 50

Simplify Industry Concentration Reporting in Form PF Question 36.......................... 53

Eliminate Certain Questions Concerning Qualifying Hedge Funds’ Exposures to

Reference Assets........................................................................................................... 55

Simplify Large Hedge Fund Adviser Counterparty Exposure Reporting .................... 61

Eliminate Rehypothecation Reporting.......................................................................... 77

15 U.S.C. 80b. Unless otherwise noted, when we refer to the Advisers Act, or any section of the Advisers Act, we

are referring to 15 U.S.C. 80b, at which the Advisers Act is codified, and when we refer to rules under the

Advisers Act, or any section of these rules, we are referring to title 17, part 275 of the Code of Federal

Regulations [17 CFR 275], and when we refer to forms under the Advisers Act, we are referring to title 17, part

279 of the Code of Federal Regulations [17 CFR 279], in which these rules and forms are published.

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III.

Amendments to Large Hedge Fund Adviser Current Reporting .................................. 80

Modify the Current Reporting Filing Deadline ................................................ 80

Eliminate Current Reporting for Notice of Margin Default or

Determination of Inability to Meet a Call for Margin, Collateral or

Equivalents ....................................................................................................... 82

Streamline Reporting of “Operations Events”.................................................. 84

Eliminate Current Reporting for Inability to Satisfy Redemption Requests .... 87

Eliminate Form PF Private Equity Quarterly Reporting in Section 6 .......................... 89

Other Corrections and Revisions .................................................................................. 91

Request for Comments on Private Credit Reporting .................................................... 94

Proposed Transition Period .......................................................................................... 97

ECONOMIC ANALYSIS .................................................................................................. 98

Introduction .................................................................................................................. 98

Baseline ...................................................................................................................... 100

Regulatory Baseline ........................................................................................ 100

Affected Parties .............................................................................................. 108

Benefits and Costs ...................................................................................................... 110

General Considerations................................................................................... 110

Increase the Filing Threshold for All Form PF Filers .................................... 113

Increase the Reporting Threshold for Large Hedge Fund Advisers ............... 116

Disregarded Feeder Funds .............................................................................. 123

Eliminate the Look Through Requirement ..................................................... 126

Trading Vehicles............................................................................................. 130

Eliminate Form PF Question 23(c) Volatility Reporting ............................... 133

Eliminate Certain Trading and Clearing Reporting ........................................ 138

Eliminate Form PF Question 32(b)(2) Adjusted Exposure Netting Based on

Internal Methodologies ................................................................................... 142

10.

Eliminate Form PF Question 34 Monthly Asset Turnover Reporting............ 144

11.

Simplify Industry Concentration Reporting in Form PF Question 36............ 146

12.

Eliminate Certain Questions Concerning Qualifying Hedge Funds’

Exposures to Reference Assets ....................................................................... 149

13.

Simplify Large Hedge Fund Adviser Counterparty Exposure Reporting ...... 152

14.

Eliminate Rehypothecation Reporting............................................................ 164

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Amendments to Large Hedge Fund Adviser Current Reporting .................... 165

16.

Eliminate Form PF Private Equity Quarterly Reporting in Section 6 ............ 173

17.

Other Corrections and Revisions .................................................................... 175

18.

Quantification of Benefits .............................................................................. 180

Present Values and Annualized Values of Monetized Benefits and Costs................. 187

Effects on Efficiency, Competition, and Capital Formation ...................................... 191

Reasonable Alternatives ............................................................................................. 194

IV.

15.

Filing Threshold ............................................................................................. 194

Reporting Threshold for Large Hedge Fund Advisers ................................... 195

Disregarded Feeder Fund................................................................................ 197

Industry Concentration Reporting .................................................................. 198

Hedge Fund Adviser Counterparty Exposure Reporting ................................ 199

Private Equity Quarterly Event Reporting...................................................... 202

Private Credit Reporting ................................................................................. 204

Request for Comment ................................................................................................. 204

PAPERWORK REDUCTION ACT ................................................................................ 206

Form PF ...................................................................................................................... 208

Purpose and Use of the Information Collection ............................................. 208

Confidentiality ................................................................................................ 209

Burden Estimates ............................................................................................ 210

Request for Comments ............................................................................................... 230

REGULATORY FLEXIBILITY ACT CERTIFICATION ............................................. 230

VI.

CONGRESSIONAL REVIEW ACT ............................................................................... 233

VII.

OTHER MATTERS ......................................................................................................... 234

VIII.

STATUTORY AUTHORITY .......................................................................................... 234

INTRODUCTION

The Commissions are proposing to amend Form PF, the confidential reporting form that

certain SEC-registered investment advisers, including those that also are registered with the CFTC as

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a CPO or a CTA, use to report information about the private funds they advise. 2 Form PF is a joint

form between the SEC and the CFTC with regard to sections 1 and 2. Sections 3, 4, 5 and 6 were

adopted solely by the SEC. For this proposal, the SEC and the CFTC are jointly amending the joint

sections of the form and the SEC is amending the SEC-only sections of the form. The proposed

amendments would eliminate filing obligations for certain advisers, eliminate and streamline certain

reporting requirements, and make corrections as well as other revisions. The proposed amendments

are designed to eliminate certain burdens, among other things, while ensuring Form PF continues to

collect information necessary and appropriate in the public interest and for the protection of investors,

or for the assessment of systemic risk in the U.S. financial system by the Financial Stability Oversight

Council (“FSOC”). 3

In 2010, the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (the

“Dodd-Frank Act”) mandated that the SEC and the CFTC, after consultation with FSOC, jointly

promulgate rules to establish the form and content of private fund reports required to be filed with the

SEC under the Advisers Act, and with the CFTC by investment advisers that are registered both under

the Advisers Act and the Commodity Exchange Act. 4 The Advisers Act further mandates that an

adviser must maintain records and reports for each private fund it advises, that include a description

of the following: (1) the amount of assets under management and use of leverage, including offbalance-sheet leverage; (2) counterparty credit risk exposure; (3) trading and investment positions;

(4) valuation policies and practices of the fund; (5) types of assets held; (6) side arrangements or side

letters, whereby certain investors in a fund obtain more favorable rights or entitlements than other

investors; (7) trading practices; and (8) such other information as the SEC, in consultation with

15 U.S.C. 80b-2(a)(29) (defining “private fund”).

See 15 U.S.C. 80b-4(b)(1)(A) and 15 U.S.C. 80b-4(b)(5).

Pub. L. 111-203, 124 Stat. 1376 (2010); 15 U.S.C. 80b-11(e).

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FSOC, determines is necessary and appropriate in the public interest and for the protection of

investors or for the assessment of systemic risk, which may include the establishment of different

reporting requirements for different classes of fund advisers, based on the type or size of private fund

being advised. 5

In response to these mandates, the Commissions adopted Form PF in 2011 and have amended

Form PF multiple times, including substantively in 2023 and 2024. 6 In 2023, among other things, the

SEC added requirements for (1) large hedge fund advisers to submit current reports about certain

events at their qualifying hedge funds, and (2) private equity fund advisers to submit certain quarterly

reports. 7

In 2024, the Commissions comprehensively amended Form PF (the “2024 amendments”), but

delayed the compliance date several times, including most recently until October 1, 2026. 8 As a

result, advisers have been allowed to continue to file the version of Form PF in effect before the

adoption of the 2024 amendments. The Commissions delayed the compliance date to (1) address

certain challenges associated with the reporting cycle timing, (2) provide the industry more time to

15 U.S.C. 80b-4(b)(3).

Reporting by Investment Advisers to Private Funds and Certain Commodity Pool Operators and Commodity

Trading Advisors on Form PF, Release No. IA-3308 (Oct. 31, 2011), [76 FR 71128 (Nov. 16, 2011)] (“2011

Form PF Adopting Release”); Form PF; Reporting Requirements for All Filers and Large Hedge Fund Advisers,

Release No. IA-6546 (Feb. 8, 2024), [89 FR 17984 (Mar. 12, 2024)] (“2024 Form PF Adopting Release”); Form

PF; Reporting Requirements for All Filers and Large Hedge Fund Advisers, IA-6865 (Mar. 19, 2025), [90 FR

15394 (Apr. 11, 2025)]; Money Market Fund Reforms; Form PF Reporting Requirements for Large Liquidity

Fund Advisers; Technical Amendments to Form N–CSR and Form N–1A, Release No. IA-6344 (Jul. 12, 2023),

[88 FR 51404 (Aug. 3, 2023)]; Form PF; Event Reporting for Large Hedge Fund Advisers and Private Equity

Fund Advisers; Requirements for Large Private Equity Fund Adviser Reporting, Release No. IA-6297 (May 3,

2023), [88 FR 38146 (Jun. 12, 2023)] (“May 2023 Form PF Adopting Release”); Money Market Fund Reform;

Amendments to Form PF, Release No. IA-3879 (Jul. 23, 2014), [79 FR 47736 (Aug. 14, 2014)].

May 2023 Form PF Adopting Release; Form PF sections 5 and 6; Glossary of Terms for the definition of

“qualifying hedge fund.”

2024 Form PF Adopting Release; Form PF; Reporting Requirements for All Filers and Large Hedge Fund

Advisers; Further Extension of Compliance Date, Release No. IA-6919 (Sept. 17, 2025), [90 FR 45131 (Sept.

19, 2025)]; see also, Form PF; Reporting Requirements for All Filers and Large Hedge Fund Advisers; Further

Extension of Compliance Date, Release No. IA-6883 (June 11, 2025), [90 FR 25140 (June 16, 2025)]; Form PF;

Reporting Requirements for All Filers and Large Hedge Fund Advisers; Extension of Compliance Date, Release

No. IA-6838 (Jan. 29, 2025), [90 FR 9007 (Feb. 5, 2025)] (“January 2025 Form PF Extension Release”).

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comply with the 2024 amendments, and (3) provide the Commissions time to complete a review in

accordance with a Presidential Memorandum issued by President Donald J. Trump. 9 Specifically, on

January 20, 2025, the President issued a Presidential Memorandum directing agencies to consider

postponing the effective date of any rules that had been published in the Federal Register, or that

were issued but had not yet taken effect, for the purpose of reviewing any questions of fact, law, and

policy that the rules may raise. The Presidential Memorandum further provides that, for those rules

that raise substantial questions of fact, law, or policy, agencies should provide notice and take further

appropriate action.

In accordance with the Presidential Memorandum, the Commissions determined to conduct a

comprehensive review that extended to the entire form. As a result of this comprehensive review, we

are proposing several changes to Form PF that are designed to eliminate certain burdens, streamline

certain requirements, and make corrections, as well as other revisions:

First, we propose to eliminate filing requirements for smaller advisers, irrespective of the

categories of private funds they advise. Specifically, we propose to raise the filing threshold for all

filers, from $150 million in private fund assets under management to $1 billion. 10 We estimate that

this proposed change would eliminate filing obligations for almost half of the advisers that currently

must file Form PF. 11 We further estimate that with this proposed filing threshold, Form PF would

continue to obtain information on over 90 percent of private fund gross asset value that advisers

See id.; Regulatory Freeze Pending Review (Jan. 20, 2025) [90 FR 8249 (Jan. 28, 2025)], available at

https://www.whitehouse.gov/presidential-actions/2025/01/regulatory-freeze-pending-review/ (the “Presidential

Memorandum”).

Proposed rule 204(b)-1(a); proposed Form PF General Instruction 1; Form PF Glossary of Terms (defining

“private fund assets under management”).

See infra, Table 2.

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report. 12 Therefore, this proposed change is designed to eliminate filing burdens for smaller advisers,

while continuing to collect data on a significant percentage of private fund assets.

Second, we propose to eliminate certain reporting requirements for smaller hedge fund

advisers. Specifically, we propose to raise the reporting threshold for large hedge fund advisers from

$1.5 billion in hedge fund assets under management to $10 billion.13 We estimate that this proposed

change would eliminate certain reporting obligations for almost two-thirds of advisers that currently

must report as large hedge fund advisers. 14 We estimate that with this proposed reporting threshold,

Form PF would continue to obtain information quarterly on over 80 percent of hedge fund gross asset

value that advisers report. 15 Therefore, this proposed change is designed to eliminate certain reporting

burdens for smaller hedge fund advisers, while continuing to obtain information on a substantial

portion of the assets of the hedge fund industry.

Third, we propose to eliminate certain requirements, including quarterly event reporting,

certain current reporting, and other requirements, as well as streamline certain requirements, and

make corrections and other revisions.

Table 1a summarizes the proposed changes to the filing threshold for all Form PF filers and

the reporting threshold for large hedge fund advisers:

Table 1a: Proposal to Increase Certain Thresholds

Eliminate filing requirements

for smaller advisers.

We propose to increase the filing threshold for all filers from $150

million in private fund assets under management to $1 billion. (Rule

204(b)-1(a) and General Instruction 1.)

Eliminate certain reporting

requirements for smaller

hedge fund advisers.

We propose to increase the reporting threshold for large hedge fund

advisers from $1.5 billion in hedge fund assets under management to

$10 billion. (General Instruction 3.)

See infra, Table 2.

Form PF General Instruction 3.

See infra, Table 4.

Id.

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Table 1b summarizes the proposed changes to the reporting obligations:

Table 1b: Proposed Changes to Reporting Obligations

Eliminate separate reporting

for certain feeder funds.

Currently, filers must separately report each component fund of masterfeeder arrangements and parallel fund structures, except under certain

limited circumstances.

We propose to eliminate this separate reporting requirement for any

feeder fund that has de minimis holdings outside a single master fund,

U.S. treasury bills, and/or cash and cash equivalents. (General

Instruction 6.)

Eliminate “look through”

requirements.

Currently, Form PF provides instructions for where a filer should “look

through” a reporting fund’s investments in other private funds and

entities.

We propose to eliminate the prescriptive “look through” requirements

and allow filers to report indirect exposures based on reasonable

estimates that are consistent with their internal methodologies and the

conventions of service providers. (General Instructions 7 and 8, and

conforming amendments to certain questions and asset classes in the

Glossary of Terms.)

Eliminate identification

requirements for certain

trading vehicles.

Currently, if a reporting fund holds assets, incurs leverage, or conducts

trading or other activities through a trading vehicle, the adviser must

provide identifying information about each such trading vehicle.

We propose to narrow the universe of trading vehicles that advisers

must identify. (Question 9.)

Eliminate certain performance Currently, if an adviser calculates a market value on a daily basis for

volatility reporting

any position in the reporting fund’s portfolio, it must report certain

requirements.

volatility information including aggregated calculated values, monthly

annualized volatility of returns, and other data associated with the daily

rates-of-return.

We propose to eliminate these requirements. (Question 23(c).)

Eliminate certain trading and

clearing reporting

requirements.

Currently, filers must report how they use trading and clearing

mechanisms, including the value traded over the reporting period and

the value of positions at the end of the reporting period.

We propose to eliminate the requirement to report the value of

positions at the end of the reporting period. (Questions 29 and 30.)

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Streamline adjusted exposure

reporting.

Currently, large hedge fund advisers must report their qualifying hedge

funds’ monthly adjusted exposures using multiple methods.

We propose to eliminate one of the methods, so advisers would no

longer be required to report additional adjusted exposure based on the

adviser’s internal methodologies. (Question 32.)

Eliminate portfolio turnover

reporting.

Currently, large hedge fund advisers must report the value of their

qualifying hedge funds’ monthly turnover by asset class.

We propose to eliminate this question. (Question 34.)

Reduce burdens associated

with reporting North

American Industry

Classification System

(“NAICS”) codes.

Currently, large hedge fund advisers must report their qualifying hedge

funds’ monthly industry exposures when they exceed a certain amount,

using the six-digit NAICS code that best describes a company’s

primary business activity and principal source of revenue.

Eliminate certain reporting

concerning qualifying hedge

funds’ monthly exposures to

reference assets and, instead,

include streamlined exposure

reporting under an existing

extraordinary loss current

report trigger.

Currently, large hedge fund advisers must report details about their

qualifying hedge funds’ monthly concentrated exposure to specific,

position-level reference assets.

Simplify certain large hedge

fund counterparty exposure

reporting.

Currently, large hedge fund advisers must report in a consolidated

counterparty exposure table their qualifying hedge funds’ borrowing,

collateral received, lending, and posted collateral, all aggregated across

all counterparties as of the end of each month.

We propose to provide flexibility to allow filers to report fewer digits

of the NAICS codes for industry exposures. (Question 36; see the

Glossary of Terms (defining “NAICS code.”)

We propose to eliminate those questions. Instead, if large hedge fund

advisers file a current report about their qualifying hedge funds’

extraordinary investment losses, they would include a description of

the largest exposure contributing to the loss. (Questions 39 and 40, and

section 5, Item B.)

We propose to eliminate this table and direct large hedge fund advisers

to: (1) complete the more simplified table in Question 26 for their

qualifying hedge funds; and (2) report all borrowings to significant

counterparties under Questions 42 and 43, and (3) categorize

significant borrowing entries in Question 42. (Questions 41 and 42, and

conforming amendments to Questions 18, 26, 43, and the Glossary of

Terms.)

Eliminate rehypothecation

reporting.

Currently, large hedge fund advisers must report the total amount of

collateral posted by counterparties to the qualifying hedge fund that

may be and has been rehypothecated by the qualifying hedge fund.

We propose to eliminate these questions. (Question 45.)

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Modify the current reporting

trigger for all current reports.

Currently, section 5 requires large hedge fund advisers to file a current

report “as soon as practicable, but no later than 72 hours” upon the

occurrence of certain events at their qualifying hedge fund.

The SEC proposes to modify the reporting trigger by removing the

requirement to report as soon as practicable. Under the proposal, large

hedge fund advisers would have the full 72 hours to file a current

report. (Section 5.)

Eliminate current reporting

for large hedge fund advisers

concerning certain margin

defaults.

Currently, large hedge fund advisers are required to report within 72

hours if their qualifying hedge fund is in margin default or is unable to

meet a call for margin, collateral, or equivalents.

Eliminate current reporting

for certain operations events.

Currently, large hedge fund advisers are required to report within 72

hours if their qualifying hedge fund client experiences an operations

event (i.e., a significant disruption or degradation of the fund’s “critical

operations”). Form PF defines “critical operations” as operations

necessary for (1) the investment, trading, valuation, reporting, and risk

management of the reporting fund; or (2) the operation of the reporting

fund in accordance with the Federal securities laws and regulations.

The SEC proposes to eliminate this requirement. (Section 5, Item D.)

The SEC proposes to eliminate the second element. (Section 5, Item G,

and the Glossary of Terms.)

Eliminate current reporting

related to the inability to

satisfy redemption requests.

Currently, large hedge fund advisers are required to report within 72

hours if their qualifying hedge fund (1) is unable to pay redemption

requests or (2) has suspended redemptions and the suspension lasts for

more than five consecutive business days.

The SEC proposes to eliminate the first element. (Section 5, Item I.)

Eliminate quarterly event

reporting for all private equity

fund advisers.

Currently, all private equity fund advisers must submit quarterly reports

about adviser-led secondary transactions, general partner removals,

termination of investment periods, and fund terminations.

The SEC proposes to eliminate this requirement. (Section 6.)

Corrections and other

revisions.

We propose to make corrections and other revisions to help ensure

filers clearly understand Form PF requirements.

Request for comments on

private credit reporting.

We are requesting comment on whether to modify the information that

advisers must report about private credit funds.

The Commissions have consulted with FSOC to gain input on this proposal, and to help

ensure that Form PF continues to provide FSOC with information it needs to carry out its monitoring

obligations and its assessment of systemic risk while also not requiring the reporting of information

that is not useful to FSOC in carrying out these responsibilities.

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II.

DISCUSSION

Increase the Filing Threshold for All Form PF Filers

The Commissions propose to increase Form PF’s filing threshold for all filers. Currently,

SEC-registered advisers must file Form PF if they and their related persons, collectively, had at least

$150 million in private fund assets under management as of the last day of their most recently

completed fiscal year. 16 We propose to increase this filing threshold from $150 million to $1 billion.17

When the Commissions adopted Form PF in 2011, the Commissions set a filing threshold of

$150 million in private fund assets under management, which aligned with the private fund adviser

registration exemption that the Dodd-Frank Act created. 18 The Commissions stated that the filing

threshold, based on an adviser’s private fund assets under management, would adequately

differentiate between advisers with only smaller funds and those with significant fund assets. 19 Since

then, Form PF has provided the Commissions with a greater ability to analyze and understand data on

private fund advisers. With over a decade of experience reviewing Form PF data, we can more

accurately determine an appropriate filing threshold for assessing systemic risk. Indeed, Form PF data

show that the private fund industry has grown dramatically. For example, from 2013 to the first

quarter of 2025, the aggregated private fund gross asset value that advisers reported on Form PF more

than tripled, from $8 trillion to over $25 trillion. 20

Rule 204(b)-1(a); Form PF General Instruction 1.

Proposed rule 204(b)-1(a); proposed Form PF General Instruction 1.

See 15 U.S.C. 80b-3(m); 17 CFR 275.203(m)-1; 2011 Form PF Adopting Release.

2011 Form PF Adopting Release at n.54.

SEC staff Private Fund Statistics (Dec. 15, 2015) and SEC staff Private Fund Statistics (First Calendar Quarter

2025), available at https://www.sec.gov/data-research/statistics-data-visualizations/private-fund-statistics. Staff

reports, statistics, and other staff documents (including those cited herein) represent the views of SEC staff and

are not a rule, regulation, or statement of the SEC. The SEC has neither approved nor disapproved the content of

these documents and, like all staff statements, they have no legal force or effect, do not alter or amend applicable

law, and create no new or additional obligations for any person.

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As Table 2 shows, we estimate that the proposed filing threshold would continue to allow

Form PF to obtain information on approximately 94 percent of the most recent aggregate private fund

gross asset value reported, while reducing the percentage of advisers that are required to file by

almost half. Therefore, this proposed change is designed to better differentiate those advisers with

significant private fund assets, consistent with the Commissions’ original intent for the filing

threshold. 21

Table 2: Comparing the Current Filing Threshold to the Proposed Filing Threshold1

Current

$150 Million

Threshold

Proposed

$1 Billion

Threshold

Impact2

Percent of All SEC-Registered

Advisers to Private Funds

70%

40%

43% fewer advisers would file.

Percent of All Private Funds

Reported by SEC-Registered

Advisers3

83%

68%

18% fewer private funds’ data

would be reported.

Percent of Private Fund Gross

Assets Reported by SECRegistered Advisers3

96%

94%

2% less gross asset value would

be reported.

Notes:

1. Form PF data as of the first quarter of 2025 and Form ADV data as of December 2024.

2. Impact Column = (Current Threshold Column – Proposed Threshold Column) / Current Threshold

Column.

3. Denominators for the Current Threshold Column and the Proposed Threshold Column calculations

include private funds reported on Form PF and Form ADV by SEC-Registered Advisers.

In determining how to propose re-calibrating the filing threshold, the Commissions considered

the alternatives outlined in Table 3 and the distribution of private fund assets across advisers with the

goal of ensuring coverage of a significant percentage of private fund industry managed assets, while

at the same time minimizing filing burdens on private fund advisers where their smaller size may

2011 Form PF Adopting Release at n.54.

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both disproportionately increase the burdens of reporting and reduce their likelihood of having a

meaningful effect on the assessment of systemic risk. 22

As evidenced by Table 3, the percentage of private fund gross assets reported by SECregistered advisers is concentrated with the largest private fund advisers (measured by assets) of the

private fund industry as a whole, which would allow us to raise the reporting threshold while

maintaining substantial reporting coverage of the private fund industry by assets. However, setting

the threshold too high has the potential to narrow the field of reporting advisers to a degree that they

skew or fail to represent the range of private fund strategies and activities that may materially inform

systemic risk assessment and investor protection efforts. Therefore, as Table 3 highlights, the

proposed filing threshold is designed to strike a balance between reducing the percentage of advisers

that would be required to file, and the associated burdens, while helping ensure that Form PF would

continue to collect information about a significant percentage of private fund gross assets

appropriately to inform the assessment of systemic risk.

By increasing the Form PF filing threshold as proposed, the burdens of Form PF’s section 1

collection of information would be more focused on advisers that manage private fund assets

representing a significant percentage of the private fund industry and, thus, providing a diverse and

representative view of private fund advisers for systemic risk assessment, while recognizing that

Form PF can be burdensome for smaller advisers that the Commissions understand generally have

fewer resources available to fulfil the reporting requirements of Form PF and who are less likely to

have systemic risk impact.

See also infra section III.C.2 for a more detailed discussion of benefits and costs of increasing the filing

threshold for all Form PF filers.

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As Table 3 indicates, by raising the filing threshold to $1 billion, we would be able to

maintain insight into the potential systemic risk implications of private funds while eliminating filing

burdens for many advisers.

Table 3: Alternative Filing Thresholds1

Filing Threshold

Percent of All SECPercent of All Private

Registered Advisers Funds Reported by SECto Private Funds

Registered Advisers2

Percent of Private Fund

Gross Assets Reported by

SEC-Registered Advisers2

Current

$150 Million

70%

83%

96%

Alternative

$250 Million

64%

83%

96%

Alternative

$500 Million

53%

76%

95%

Proposed

$1 Billion

40%

68%

94%

Alternative

$2 Billion

30%

60%

91%

Alternative

$3 Billion

25%

55%

89%

Alternative

$4 Billion

22%

51%

87%

Notes:

1. Form PF Data as of the First Quarter of 2025 and Form ADV data as of December 2024.

2. Denominators for the calculations include private funds reported on Form PF and Form ADV by

SEC-Registered Advisers.

SEC-registered advisers that would no longer meet the Form PF filing threshold, and as a

result, would no longer be required to report on Form PF, would nonetheless continue to publicly

report certain information about their private funds on 17 CFR 279.1 (Form ADV), as all SECregistered advisers of such funds are required to do. Form ADV, which is publicly available, provides

the SEC and investors with information about advisers (including private fund advisers) and the funds

they manage, and is designed to provide the SEC with information necessary to its investor protection

efforts. In contrast, Form PF is primarily designed to facilitate FSOC’s assessment of systemic risk,

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although it is available to assist the Commissions in their regulatory programs for the protection of

investors. 23 Accordingly, the proposed changes would not eliminate all private fund data reporting for

the affected advisers. Any SEC-registered adviser that would no longer be required to file Form PF

would nonetheless continue to report information about its private funds on Form ADV. 24

We request comment on the proposed change to the filing threshold:

1. Should the Commissions increase the filing threshold for all private fund advisers as

proposed? If not, should the current filing threshold be kept constant, increased less than the

proposed threshold, or increased more than the proposed threshold? Should the Commissions

adopt any of the alternative thresholds presented in Table 3? For example, should the

Commissions adopt a filing threshold of $250 million, $500 million, $2 billion, or $3 billion?

If the threshold should be changed, what is the appropriate threshold and why?

2. Would the proposal to increase the filing threshold sufficiently alleviate burdens on private

fund advisers? Please provide quantitative and qualitative data to support your conclusion.

3. Would the proposed filing threshold result in Form PF collecting information about the private

fund industry necessary and appropriate in the public interest and for the protection of

investors, or for the assessment of systemic risk?

4. Should the Commissions also adopt a filing threshold that adjusts for inflation? If the

Commissions should adopt an inflation adjustment for the filing threshold, how should the

Commissions measure the inflation adjustment? For example, should the Commissions

measure the inflation adjustment from the time of the filing threshold’s original adoption in

2011, or from the date the inflation adjustment would be adopted, or from another date? Is

See 15 U.S.C. 80b-4(b)(1)(A);15 U.S.C. 80b-4(b)(5); Form PF.

These advisers also must continue to comply with the Adviser Act’s mandate to maintain certain enumerated

records and reports for each private fund. See 15 U.S.C. 80b-4(b)(3).

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there a price index, such as the Personal Consumption Expenditures Chain-Type Price Index,

the Consumer Price Index for All Urban Consumers, the Producer Price Index, or the GDP

Price Deflator, that would be best suited for this adjustment? Would using a securities market

index such as the S&P 500 or the NYSE Composite Index, which is not based on inflation, be

a better way to adjust the filing threshold on an ongoing basis? At what cadence should the

inflation be adjusted? For example, yearly, or every ten years, or any other cadence?

Increase the Reporting Threshold for Large Hedge Fund Advisers

The Commissions also propose to increase Form PF’s reporting threshold for large hedge fund

advisers. Currently, to qualify as a large hedge fund adviser, a Form PF filer and its related persons

must have, collectively, at least $1.5 billion in hedge fund assets under management as of the last day

of any month in the fiscal quarter immediately preceding their most recently completed fiscal quarter

and manage a qualifying hedge fund. 25 We propose to increase the large hedge fund reporting

threshold from $1.5 billion to $10 billion.26

If an adviser qualifies as a large hedge fund adviser, it must file section 1 quarterly, instead of

annually as it would if it were a hedge fund adviser that did not qualify as a large hedge fund

adviser. 27 Section 1a requires all advisers to report general identifying information about themselves

and the private funds they advise, including a breakdown of regulatory assets under management and

net assets under management. Section 1b requires all advisers to report information about each

private fund they advise, including the following: (1) the private fund type; (2) assets, financing, and

investor concentration; and (3) performance. Section 1c requires all advisers to report information

Form PF General Instruction 3; Form PF Glossary of Terms (defining “hedge fund assets under management”).

Proposed Form PF General Instruction 3.

Form PF General Instruction 9.

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about each hedge fund they advise, including the following: (1) investment strategies; (2) exposures;

(3) counterparties; and (4) trading and clearing mechanisms.

If an adviser qualifies as a large hedge fund adviser, it also must file Form PF section 2

quarterly with respect to each qualifying hedge fund that it advises, including the following: (1)

identifying information; (2) exposures and trading; (3) risk metrics and performance; (4) financing

information; and (5) investor information. 28

If an adviser qualifies as a large hedge fund adviser, it is also subject to Form PF Section 5

reporting, which requires a large hedge fund adviser to report information as soon as practicable, but

no later than 72 hours upon the occurrence of certain events at qualifying hedge funds it advises,

including the following: (1) extraordinary investment losses; (2) margin, collateral, or equivalent

increases; (3) notice of margin default or determination of inability to meet a call for margin,

collateral, or equivalents; (4) counterparty defaults; (5) prime broker relationships that have been

terminated or materially restricted; (6) operations events; (7) withdrawals and redemptions; and (8) if

the qualifying hedge fund is unable to satisfy redemptions or suspends redemptions.

Therefore, an adviser that would no longer qualify as a large hedge fund adviser under the

proposed threshold would file section 1 annually, instead of quarterly, and would not file section 2 or

be subject to section 5 current reporting, absent any other requirements. 29 While the quarterly section

1, quarterly section 2, and section 5 current reporting are important for the largest hedge fund

advisers that are more likely to be systemically important, they can impose disproportionate burdens

Form PF General Instruction 3 and Form PF section 2.

For example, large liquidity fund advisers must file section 1 quarterly, among other requirements. See Form PF

General Instruction 9.

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on smaller advisers that are less likely to be systemically important. 30 Any SEC-registered adviser

would continue to report information about its private funds on Form ADV. 31

When Form PF was originally adopted, the Commissions stated that the reporting thresholds

were designed so that the group of large private fund advisers (including large hedge fund advisers)

filing Form PF would be relatively small in number but would represent a substantial portion of the

assets of their respective industries. 32 At that time, the Commissions estimated that advisers each

managing at least $1.5 billion in hedge fund assets represented over 80 percent of the U.S. hedge fund

industry based on assets under management. 33

As Table 4 shows, we estimate that the proposed higher threshold would still result in Form

PF obtaining information quarterly on over 80 percent of hedge fund gross asset value that advisers

report, while reducing the percentage of advisers that are required to file as large hedge fund advisers

by almost two-thirds. Therefore, the proposed change is designed to continue to obtain information

on a substantial portion of the assets of the hedge fund industry, consistent with the Commission’s

original intent for the large hedge fund reporting threshold, while reducing burdens on hedge fund

advisers.

See infra section III.C.3 for a more detailed discussion of benefits and costs of increasing the reporting threshold

for large hedge fund advisers.

See supra footnote 24.

2011 Form PF Adopting Release at text after n.87.

2011 Form PF Adopting Release at n.88 and accompanying text.

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Table 4: Comparing the Current Large Hedge Fund Reporting Threshold to the

Proposed Reporting Threshold1

Current

$1.5 Billion

Threshold

Proposed

$10 Billion

Threshold

Impact2

Percent of SEC-registered

advisers reporting as large

hedge fund advisers

26%

65% fewer advisers would be

required to report as large hedge

fund advisers.

Percent of hedge funds

reported by large hedge

fund advisers related to

those reported by all SECregistered advisers3

49%

34%

Data on 31% fewer hedge funds

would be reported under the large

hedge fund adviser requirements,

and instead would be reported under

other requirements, as applicable.

Percent of hedge fund gross

assets reported by large

hedge fund advisers related

to those reported by all

SEC-registered advisers3

92%

81%

12% less of hedge fund gross asset

value would be reported under the

large hedge fund adviser

requirements, and instead would be

reported under other requirements,

as applicable.

Notes:

1. Form PF data as of the first quarter of 2025 and Form ADV data as of December 2024.

2. Impact Column = (Current Threshold Column – Proposed Threshold Column) / Current

Threshold Column.

3. Denominators for the Current Threshold Column and the Proposed Threshold Column

calculations include hedge funds reported on Form PF and Form ADV by SEC-Registered

Advisers.

We chose the proposed reporting threshold in light of the alternatives outlined below in Table

5, with the goal of helping ensure that Form PF would continue to collect information necessary and

appropriate in the public interest and for the protection of investors, or for the assessment of systemic

risk, while reducing burdens on hedge fund advisers. 34 As in the past, the proposed amended

reporting threshold is designed so that the group of large hedge fund advisers filing Form PF would

be relatively small in number but represent a substantial portion of hedge fund assets. 35 In

15 U.S.C. 80b-4(b)(1)(A) and 15 U.S.C. 80b-4(b)(5).

See 2011 Form PF Adopting Release at text following n.87.

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determining where to propose re-calibrating the reporting threshold, the Commissions considered the

alternatives outlined in Table 5 and the distribution of hedge fund assets with the goal of ensuring

coverage of a substantial portion of hedge fund assets, while at the same time minimizing filing

burdens on hedge fund advisers where their smaller size may both increase the burdens of reporting

and reduce their likelihood of having a meaningful effect on the assessment of systemic risk.

As evidenced by Table 5, the percent of hedge fund gross assets reported by SEC-registered

hedge fund advisers is concentrated at the largest hedge fund advisers, which would allow us to raise

the reporting threshold while maintaining substantial reporting coverage of the hedge fund industry

assets. However, setting the threshold too high has the potential to narrow the field of large hedge

fund advisers to a degree that they skew or fail to represent the range of hedge fund strategies and

activities that may materially inform systemic risk assessment. As a result, FSOC and the

Commissions could miss emerging trends in the hedge fund industry. Furthermore, too few hedge

fund advisers subject to quarterly reporting, instead of annual reporting, as well as enhanced Form PF

reporting in sections 2 and 5, could result in FSOC and the Commissions being alerted in a less

timely manner to certain events that may indicate significant stress at a hedge fund that could signal

risk in the broader financial system. Therefore, as Table 5 highlights, the proposed reporting threshold

is designed to strike the appropriate balance between reducing the percentage of hedge fund advisers

that would be required to file as large hedge fund advisers, while helping ensure that Form PF would

continue to collect information on a substantial portion of the assets of the hedge fund industry.

In addition, the SEC is proposing to require its staff to report to the SEC on each filing and

reporting threshold in the form, assessing whether any should be adjusted, approximately five years

after the compliance date for the amendments to the form and approximately every five years

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thereafter. 36 These staff reports would help the SEC periodically evaluate the continued

appropriateness of the filing and reporting thresholds in all respects, including whether proposing

revisions to the thresholds would be appropriate. In producing this report, the staff would be directed

to consider data collected by the SEC pursuant to Form PF, as well as any other applicable

information as the staff may determine to be appropriate for its analysis. As the private fund adviser

industry grows and changes, such a report and related review would be designed to ensure that the

form continues to impose minimal filing burdens for small advisers, while continuing to collect data

on a significant percentage of private fund assets. 37

Proposed rule 204(b)-1(h).

See also 15 U.S.C. 80b-4(b)(3)(H) (providing that the reports required by an investment adviser for each private

fund advised by the investment adviser, among other matters, may include the establishment of different

reporting requirements for different classes of fund advisers, based on the type or size of private fund being

advised).

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Table 5: Alternative Large Hedge Fund Reporting Thresholds1

Reporting

Threshold

Percent of All

SEC-Registered

Advisers to

Hedge Funds

Percent of All

Hedge Funds

Reported by

SEC-Registered

Advisers2

Percent of

Percent of Hedge

Hedge Fund

Fund Gross

Gross Assets

Assets Reported

Reported

as QHFs by

Quarterly by

SEC-Registered

Advisers2,3

Advisers

Current

$1.5 Billion

26%

49%

92%

84%

Alternative

$2 Billion

22%

47%

91%

83%

Alternative

$3 Billion

19%

44%

90%

82%

Alternative

$5 Billion

14%

41%

86%

79%

Alternative

$7.5 Billion

11%

37%

83%

76%

Proposed

$10 Billion

34%

81%

74%

Alternative

$15 Billion

29%

77%

70%

Alternative

$20 Billion

27%

74%

68%

Notes:

1. Form PF Data as of the First Quarter of 2025 and Form ADV data as of December

2024.

2. Denominators for the calculations include hedge funds reported on Form PF and Form

ADV by SEC-Registered Advisers.

3. Reported by SEC-registered advisers for qualifying hedge funds (QHFs) on Form PF

section 2.

We request comment on the proposed change to the large hedge fund reporting threshold:

5. Should the Commissions increase the large hedge fund adviser reporting threshold, as

proposed? If not, should the current reporting threshold be kept constant, increased less than

the proposed threshold, or increased more than the proposed threshold? Instead of the

proposed reporting threshold, should the Commissions adopt one of the alternative thresholds

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listed in Table 5? For example, should the Commissions adopt a reporting threshold of $2

billion, $3 billion, $15 billion, or $20 billion? If the threshold should be changed, what is the

appropriate threshold and why?

6. Would the proposal to increase the reporting threshold sufficiently alleviate burdens on hedge

fund advisers? Please provide quantitative and qualitative data.

7. Would the proposed reporting threshold result in Form PF collecting information about the

hedge fund industry necessary and appropriate in the public interest and for the protection of

investors, or for the assessment of systemic risk?

8. The SEC is proposing to require its staff to report to the SEC on each filing and reporting

threshold in the form, assessing whether any should be adjusted, approximately five years

after the compliance date for the amendments to the form and approximately every five years

thereafter. Alternatively, should the Commissions adopt a large hedge fund adviser reporting

threshold that adjusts for inflation? If so, should the Commissions adopt the same inflation

adjustment for all or just certain reporting thresholds in Form PF, or only for the large hedge

fund adviser threshold? If the Commissions should adopt an inflation adjustment for any

reporting threshold on Form PF, how should the Commissions measure the inflation

adjustment? For example, should the Commissions measure the inflation adjustment from the

time of the reporting threshold’s original adoption in 2011, or from the date the inflation

adjustment would be adopted, or from another date? Is there a price index, such as the

Personal Consumption Expenditures Chain-Type Price Index, the Consumer Price Index for

All Urban Consumers, the Producer Price Index, or the GDP Price Deflator, that would be

best suited for this adjustment? Would using a securities market index such as the S&P 500 or

the NYSE Composite Index, which is not based on inflation, be a better way to adjust the

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reporting threshold on an ongoing basis? At what cadence should the inflation be adjusted?

For example, yearly, or every ten years, or any other cadence?

9. Should the Commissions increase the qualifying hedge fund threshold? Why or why not?

What is the appropriate qualifying hedge fund threshold (e.g., a net asset value of $750

million or $1 billion)? The qualifying hedge fund threshold is based on net asset value, while

the large hedge fund adviser threshold is based on gross asset value. Under the proposed

amendments this construction would have two results: (1) it identifies and requires more

detailed and frequent reporting for hedge fund advisers that manage several large hedge funds

and (2) it identifies and requires more detailed and frequent reporting for hedge fund advisers

that manage hedge funds with significant use of leverage. Is there an alternative approach to

ensure hedge funds using significant leverage are reporting in the more detailed section 2 on a

quarterly basis? If we increased the qualifying hedge fund threshold, should we change the

threshold to measure on a gross asset value basis so that it does not disproportionately

eliminate more frequent and detailed reporting from more leveraged hedge funds?

10. Should the Commissions increase the large liquidity fund adviser threshold? Why or why not?

If so, what is the appropriate threshold for large liquidity fund advisers (e.g., $2 billion, $3

billion, $5 billion)?

11. Should the Commissions increase the large private equity fund adviser threshold? Why or

why not? If so, what is the appropriate threshold for large private equity fund advisers (e.g.,

$3 billion, $5 billion)?

Disregarded Feeder Funds

The Commissions propose to allow advisers not to separately report feeder funds with

minimal holdings outside of a feeder fund’s interest in a master fund. Specifically, the Commissions

propose to revise General Instruction 6 to permit advisers to treat a feeder fund as “disregarded” if it

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invests not more than five percent of its gross asset value in investments that are not in a single

master fund, U.S. treasury bills, and/or cash and cash equivalents. 38 This proposed change is

designed to reduce filing burdens on advisers and better balance against the need for the

Commissions and FSOC to understand the reporting fund’s structure and the risk exposure of its

component funds. 39

Prior to the 2024 amendments, Form PF provided advisers with flexibility to respond to

questions regarding master-feeder arrangements and parallel fund structures, either in the aggregate

or separately, as long as they did so consistently throughout Form PF. This resulted in some advisers

reporting in aggregate and some advisers reporting separately, and consequently, obscured risk

profiles (e.g., with respect to leverage, counterparty exposure, investor liquidity) and created

difficulties when comparing complex structures. 40

In 2024, the Commissions adopted amendments to Form PF that generally require separate

reporting for every component fund of a master-feeder arrangement and parallel fund structure. 41 By

prescribing the way advisers report master-feeder arrangements and parallel fund structures, the 2024

amendments were intended to provide the Commissions and FSOC with better insight into the risks

and exposures of these arrangements. The 2024 amendments, however, required disregarded feeder

funds to be aggregated in the reporting about master-feeder arrangements and parallel fund structures.

Defined in General Instruction 6 as a feeder fund that invests all of its assets in a single master fund,

See proposed Form PF General Instruction 6.

See infra section III.C.4 for a more detailed discussion of the benefits and costs of the proposed change to Form

PF General Instruction 6.

See 2024 Form PF Adopting Release at section II.A.1.

See current Form PF General Instruction 6.

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U.S. treasury bills, 42 and/or cash and cash equivalents, a “disregarded feeder fund” effectively

invests only through its associated master fund, and the Commissions stated that separate reporting of

these funds is not necessary for data analysis purposes because it would not convey additional

information about their exposures. 43

Since the adoption of the 2024 amendments, industry members have highlighted the

significance of the burdens associated with disaggregating feeder funds in their reporting. 44 In

communications with the SEC staff, several filers have stated that many private funds utilize complex

master-feeder arrangements, and that separate reporting of feeder funds without additional exceptions

would cause substantial burdens because it requires the collection of many more data points about

many more fund entities in these private fund structures. 45 Some filers said feeders that hold minimal

holdings outside of the master fund should be disregarded, as the de minimis amount of these outside

assets do not alter the risk picture of the feeder. These filers stated that disaggregated reporting does

not reflect how advisers typically manage risk and liquidity for these funds, and that reporting

instructions should align with advisers’ typical risk management practices in order to result in

meaningful and accurate data. 46

In response to these concerns, we are proposing to change General Instruction 6 to allow

advisers to aggregate in their reporting about master-feeder arrangements feeder funds that hold a de

See 2024 Form PF Adopting Release at n.25 (explaining that U.S. treasury bills, which are direct obligations of

the U.S. Government with a maturity of one year or less, are “sufficiently cash-like” for purposes of the

Commissions’ reporting and data analysis).

See 2024 Form PF Adopting Release at section II.A.1.

See, e.g., Comment Letter of the Alternative Investment Management Association (June 10, 2025).

See, e.g., Comment Letter of Managed Funds Association (Mar. 11, 2025).

See id.

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minimis amount of investments outside of the master fund. 47 Under the proposed change to General

Instruction 6, advisers would be able to treat a feeder fund that invests not more than five percent of

its gross asset value 48 in other investments that are not in a single master fund, U.S. treasury bills,

and/or cash and cash equivalents, as a disregarded feeder fund. Accordingly, advisers would be

permitted to aggregate such feeder funds in their reporting about master-feeder arrangements on Form

PF. In our view, five percent is an appropriate threshold because it parallels the threshold used in

other parts of Form PF to represent a fund’s material exposure and a level of exposure that could be

significant enough to present broader systemic risk and contagion risk. 49 The proposed change seeks

to better align the Form PF reporting requirements with the way advisers typically track and manage

the risk profile of feeder funds while preserving the Commissions and FSOC’s ability to obtain a

clear understanding of fund structures and the risk exposure of their component funds. 50

We request comment on the proposed change to General Instruction 6:

12. Would the proposed change to General Instructions 6 sufficiently alleviate burdens on private

fund advisers?

The proposal also includes changes to Example 1 in General Instruction 6 to illustrate the application of the

proposed de minimis exception.

Form PF instructs advisers to calculate gross asset value in accordance with Part 1A, Instruction 6.e(3) of Form

ADV, which requires using regulatory assets under management. Instructions for calculating regulatory assets

under management are found in Part 1A, Instruction 5.b of Form ADV. See “gross asset value” and “regulatory

assets under management” as defined in Form PF Glossary of Terms; Form ADV: Instructions for Part 1A,

Instruction 5.b and Instruction 6.e(3). An adviser must calculate its regulatory assets under management on a

gross basis, that is, without deduction of any outstanding indebtedness or other accrued but unpaid liabilities. In

addition, an adviser must include the amount of any uncalled capital commitments made to a private fund

managed by the adviser.

See, e.g., current Questions 27, 28, 32, 33, 35, 36, 42, 43, 44, 57 of Form PF; 2024 Form PF Adopting Release at

section II.B.3 and section II.C.2. See also infra section III.F.3for a discussion of reasonable alternatives to this

threshold and infra section III.C.4 for further discussion of the benefits and costs of the proposed de minimis

exception.

See also infra section III.C.4 (explaining that the impact of the proposed change would be mitigated by the “look

through” requirements we are retaining for reporting at the master fund level).

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13. Would the proposed change to General Instruction 6 result in the collection of information

about private fund structures and the risk exposure of their component funds necessary and

appropriate in the public interest and for the protection of investors, or for the assessment of

systemic risk?

14. Would the proposed change to General Instruction 6 result in certain feeder funds that are

necessary to assess systemic risk not being identified in the form? If so, how?

15. Is five percent the appropriate threshold for disregarding feeder funds with minimal holdings

outside of the master fund? Why or why not? What other percentages (e.g., three percent, ten

percent) or methods should the Commissions consider for purposes of identifying disregarded

feeder funds that are not necessary and appropriate for the assessment of systemic risk? For

example, should we allow filers to treat any feeder fund as disregarded if the filer does not

separately consider the feeder fund and its exposures for its risk management purposes?

Should we allow, as was the case prior to the 2024 amendments, filers to choose whether to

respond to questions in the aggregate or separately, as long as they did so consistently through

Form PF? Why or why not?

16. Is “gross asset value,” as defined in the Form PF Glossary of Terms, the appropriate

denominator for disregarding feeder funds with minimal holdings outside of the master fund?

Why or why not? What alternatives should the Commissions consider as the denominator for

purposes of disregarding feeder funds that are not necessary and appropriate for the

assessment of systemic risk?

17. Are there types of investments or features of feeder funds that should be considered in

permitting aggregation?

18. Is the proposed change to the definition of disregarded feeder fund in General Instruction 6

sufficiently clear? Would this raise any questions about how to determine which feeder funds

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should be disregarded for purposes of General Instruction 6? Should we provide any

additional clarification regarding which feeder funds should be disregarded for purposes of

General Instruction 6?

Eliminate the Look Through Requirement

The Commissions propose changes to Form PF that would allow advisers to report indirect

exposures based on reasonable estimates that are consistent with their internal methodologies and the

conventions of service providers when responding to certain questions that currently require looking

through the reporting fund’s investments. Specifically, the Commissions propose to eliminate from

General Instructions 7 and 8 the prescriptive requirement that advisers “look through” the reporting

fund’s investments when reporting indirect exposures and to instead allow advisers to rely on

reasonable estimates consistent with their internal methodologies and conventions of service

providers when reporting indirect exposures. 51 The Commissions also propose conforming

amendments to the instructions for Questions 32, 33, 35, 36, and 47, and to amend the definitions of

certain asset classes in the Glossary of Terms, to allow advisers to report indirect exposures consistent

with the amended General Instructions 7 and 8. These changes are intended to reduce and better

balance the filing burdens on advisers against the need to obtain clear and comparable data across

advisers.

In 2024, the Commissions adopted amendments to General Instructions 7 and 8 to provide

that, when responding to questions, advisers generally must not “look through” a reporting fund’s

investments in other funds or entities (other than a trading vehicle), unless the question instructs the

adviser to report exposure obtained indirectly through the reporting fund’s positions in such other

This proposal, however, would retain the instruction in current General Instruction 7 that advisers must include

(look through to) the trading vehicle’s holdings for all questions answered by the reporting fund.

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funds or entities. In reporting indirect exposures of the reporting fund in response to certain questions

(Questions 32, 33, 35, 36 and 47), General Instruction 7 requires advisers to “look through” the

reporting fund’s investments in internal private funds and external private funds. Likewise, General

Instruction 8 requires advisers to “look through” the reporting fund’s investments in other funds or

entities when reporting indirect exposures in response to those same questions.

Prior to the 2024 amendments, Form PF generally did not address how to report indirect

exposures resulting from positions held through other entities, and advisers were not required to

(although they had the option to) look through a reporting fund’s investments in another entity, unless

the form specifically requested information regarding that entity.52 As a result, some advisers were

reporting indirect exposures, while others were not, leading to incomplete and unclear data,

inconsistent comparisons, and less precise analysis across advisers. The 2024 amendments changed

General Instructions 7 and 8 to direct advisers to report indirect exposures in response to certain

questions by mandatorily looking through the reporting fund’s investments in private funds and other

entities. These changes were designed to promote FSOC’s effective systemic risk assessments and the

Commissions’ investor protection efforts by reducing issues of data quality and incomparability with

respect to data regarding indirect exposures of private funds.

After the adoption of the 2024 amendments, however, industry members reported that the

rigid and granular reporting required via this mandatory look-through would create significant

burdens and in many cases would be operationally difficult. 53 For example, several filers noted that

looking through a reporting fund’s investment in an exchange-traded fund (an “ETF”) to calculate the

reporting fund’s indirect exposure to each underlying investment in the ETF could be particularly

See 2024 Form PF Adopting Release at section II.A.2.

See, e.g., Comment Letter of the Alternative Investment Management Association (Sept. 5, 2025) (“AIMA Letter

II”).

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burdensome in instances where the ETF tracks and continuously rebalances a broad index comprising

potentially hundreds of underlying investments. Other filers stated that the methodology for

determining the exact composition of an index may be proprietary and not controlled by the adviser.

We also heard concerns that looking through the reporting fund’s investments in other entities,

such as investments in another private fund that in turn invests in portfolio companies, private credit

instruments, or securitized assets, could be operationally challenging, if the adviser does not control

those entities and therefore has limited access to information regarding the underlying investments, or

the data that the adviser does obtain does not align with the timing and reporting requirements of

Form PF.

In consideration of these concerns, we are now proposing changes to General Instructions 7

and 8 to eliminate the prescriptive requirement that advisers “look through” the reporting fund’s

investments when reporting indirect exposures and to instead allow advisers to report required

indirect exposures based on reasonable estimates that are consistent with the adviser’s internal

methodologies and conventions of service providers. We are also proposing amendments to Questions

32, 33, 35, 36 and 47 to remove instructions that reasonable estimates used to report indirect

exposures, and that indirectly held entity positions in a sub-asset class and instrument type, must

“best represent” the exposure of the entity 54 or the sub-asset class exposure of the indirectly held

entity. 55 The prescriptive look-through requirement in General Instructions 7 and 8 as well as the

“best represent” standard in the specific questions’ instructions for reporting indirect exposures would

create burdens for advisers to conduct look-through for assessing indirect exposures even though they

may reasonably and more efficiently estimate such indirect exposures in their own portfolio and risk

See proposed Questions of 33, 35, 36, and 47 of Form PF.

See proposed Question 32 of Form PF.

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management processes. The proposed changes are intended to provide advisers the ability to rely on

reasonable estimates to report indirect exposures, provided they are consistent with their internal

methodologies and the conventions of service providers. 56 For example, with respect to a reporting

fund’s investment in a gold ETF, the proposed changes would allow advisers to estimate the reporting

fund’s exposure through an ETF more broadly (e.g., “gold commodities” sub-asset class) to the extent

consistent with their own portfolio and risk management processes.

Relatedly, the Commissions propose conforming amendments to align other parts of the form

with the proposed General Instructions 7 and 8. The proposed changes would include conforming

amendments to Question 32 and Question 47 to remove certain references to indirectly held

“positions.” 57

The Commissions also propose to revise definitions of certain asset classes in the Form PF’s

Glossary of Terms to explicitly subject those definitions to proposed General Instructions 7 and 8. 58

As part of the 2024 amendments, Form PF defined these asset classes also requiring the reporting

fund to look through to indirect exposures to such assets held through another entity. The proposed

definitional changes are intended to allow advisers, consistent with General Instructions 7 and 8, to

use their reasonable estimates that are consistent with the adviser’s internal methodologies and

conventions of service providers for such indirect exposures. These proposed changes would also

help to resolve any inconsistencies between the instructions in the definitions of these terms and

General Instructions 7 and 8.

See infra section III.C.5 for further discussion of the anticipated cost savings to advisers that would result from

the proposed changes to General Instructions 7 and 8.

See proposed Question 32 and Question 47 of Form PF.

See proposed Form PF Glossary of Terms (definitions of “agency securities,” “commodities,” “convertible

bonds,” “corporate bonds,” “GSE bonds,” “leveraged loans,” “listed equity,” “other commodities,” “sovereign

bonds,” “unlisted equity,” and “US treasury securities”).

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Furthermore, the Commissions propose to make a conforming change to the definition of

“reference asset” in the Form PF Glossary of Terms by removing the phrase “and do not conflict with

any instructions or guidance relating to this Form,” which would be unnecessary with the proposed

changes to General Instructions 7 and 8 that would allow for the use of reasonable estimates

consistent with internal methodologies to report indirect exposures. 59

Although the proposed changes to General Instructions 7 and 8 (and related conforming

changes) would lead to more filers using their internal practices to report indirect exposures and to do

so less precisely, thus potentially reducing the level of specificity and comparability of indirect

exposures through fund or entity holdings reported by advisers on Form PF, 60 we anticipate that these

changes would not undermine FSOC’s systemic risk assessment and the Commission’s investor

protection efforts. Based on input received from filers, we understand that the operational challenges

posed by the strict look-through requirement, such as lack of the advisers’ control of or access to

granular position data of underlying fund or entity investments from third party entities or third party

data that comports with the reporting requirements of Form PF, would likely, in practice, result in

advisers having to rely on internal assumptions to comply with Form PF’s requirements. As such, the

prescriptive look-through requirements in General Instructions 7 and 8 would likely not achieve the

intended outcome, making any greater granularity and comparability unjustified in light of the

apparent significant filing burdens on advisers. 61 Our proposal, however, would retain questions

See proposed Form PF Glossary of Terms (definition of “reference asset”). The Commissions also propose to

revise the definition of “reference asset” to add “e.g.,” in front of “through direct ownership (i.e., a physical or

cash position), synthetically (i.e., the subject of a derivative or similar instrument held by the reporting fund), or

indirect ownership (e.g., through ETFs, other exchange traded products, U.S. registered investment companies,

non-U.S. registered investment companies, internal private funds, external private funds, commodity pools, or

other companies, fund or entities))” in order to help filers understand that these are examples, not a prescriptive

nor comprehensive list, of ways a reporting fund may have exposure to a reference asset.

See id.

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mandating the reporting of indirect exposures and thus preserve the objective of the 2024

amendments to address issues of data quality and comparability that had resulted from some advisers

providing indirect exposures while others did not.

Moreover, the proposed changes would preserve FSOC’s ability to assess systemic risk and

the Commissions’ ability to protect investors by collecting data based on advisers’ portfolio risk

management processes, which themselves are designed to capture material risk exposures from

investments.

We request comment on the proposed changes to General Instructions 7 and 8, the definitions

of certain asset classes in the Form PF Glossary of Terms, and other conforming changes:

19. Would the proposed changes to General Instructions 7 and 8, the definitions of asset classes

including “reference asset,” and other conforming changes sufficiently alleviate burdens on

private fund advisers?

20. Would the proposed changes to General Instructions 7 and 8 and the definitions of asset

classes including “reference asset” result in the collection of information about the reporting

fund’s indirect exposure necessary and appropriate for investor protection and the assessment

of systemic risk?

21. Should the “look through” requirement for certain, or all, questions be eliminated entirely, as

proposed, and allow advisers to instead rely on reasonable estimates that are consistent with

their internal methodologies and conventions of service providers? If not, why not?

22. Are certain questions easy to “look through” funds, entities and investments than others? If so,

which ones and why?

23. Are there certain types of funds or entities that are easy to “look through”? If so, which ones

and why?

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24. Are there certain types of reference assets that are easy to report on a “look through” basis? If

so, which ones and why?

25. Should the form require a “look through” for certain, or all, types of funds, entities or

reference assets? If so, which ones and why?

Trading Vehicles

The Commissions propose to amend Question 9 under section 1b of the Form PF to reduce the

scope of trading vehicles that advisers must specifically identify. The proposed new scope focuses

solely on trading vehicles that face counterparties and creditors or are reported on Form ADV as a

private fund. This proposed change is intended to reduce the burdens on advisers with respect to

identifying trading vehicles while still supporting the need for the Commissions and FSOC to

understand the reporting fund’s use of trading vehicles relevant to identifying systemic risk and investor

protection efforts. 62

Before the 2024 amendments, Form PF did not require advisers to identify trading vehicles,

even though private funds often use trading vehicles to trade, incur leverage, and bear counterparty and

credit exposures as part of their investment strategy. 63 In 2024, the Commissions adopted amendments

to section 1b to obtain a clear view of the reporting fund’s use of trading vehicles in this manner and

therefore to enhance FSOC’s ability to monitor systemic risk and the Commissions’ ability to protect

investors by better assessing the scope of the reporting fund’s position sizes and counterparty exposures

that are attributable to the trading vehicle and identifying areas in need of outreach, examination or

investigation. The broad definition of “trading vehicle” in the final form was intended to ensure that

See infra section III.C.6 for a detailed discussion of the benefits and costs of the proposed change to Question 9

of Form PF.

See 2024 Form PF Adopting Release at section II.A.2 (discussing the various ways private funds may use trading

vehicles for their investment activities).

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such trading vehicles were captured, 64 and Question 9 was designed to obtain identifying information

about any trading vehicle used by the reporting fund that met this definition. 65

Since the adoption of the 2024 amendments, filers have highlighted the broad scope of trading

vehicles that would need to be identified on the form and the significance of the burden on advisers of

having to meet this requirement. 66 Private funds may use trading vehicles for a wide variety of purposes

other than trading and bearing counterparty exposure. Consequently, the broad definition of “trading

vehicle,” which includes an entity that “holds assets” and conducts “other activities” as part of the

reporting fund’s investment activities, potentially captures passive entities (e.g., tax blockers, liability

blockers, aggregator vehicles used to consolidate investments from investors in private funds, passive

holding companies formed to hold portfolio investments) that are commonly used by private funds for

structuring, tax and/or other operational efficiencies. Many of these passive entities, however, may not

otherwise actively trade nor engage in other activities directly related to the fund’s counterparty or

credit exposures in a manner that creates interconnectedness of the trading vehicle to the broader

financial services industry, a critical part of systemic risk assessment and investor protection efforts.

Some filers have expressed concern that under the current “trading vehicle” definition, they would have

to report hundreds of entities in certain private fund structures, imposing significant burdens on those

advisers. 67

A trading vehicle is defined as a separate legal entity, wholly or partially owned by one or more reporting

funds,

that holds assets, incurs leverage, or conducts trading or other activities as part of a reporting fund’s investment

activities but does not operate a business. See Form PF Glossary of Terms (definition of “trading vehicle”).

See current Question 9 of Form PF. Questions 9(d) through (f) ask the reporting fund to identify the vehicle’s

activities that results in it being a “trading vehicle,” as defined in the Form PF Glossary of Terms.

See, e.g., Comment Letter of Investment Adviser Association (May 1, 2025), available at

https://www.investmentadviser.org/wp-content/uploads/2025/05/IAA-Letter-to-SEC-Chairman-Atkins5.1.25.pdf?t=6813b4b033567 (“IAA Letter”).

See, e.g., IAA Letter.

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After considering the scope of trading vehicles that must be reported under Question 9 in light

of systemic risk assessment and investor protection efforts, as well as the significance of the burdens

on advisers raised by the current instructions, we propose to reduce the scope of trading vehicles that

must be reported under Question 9 to focus on trading vehicles that face counterparties and creditors

or are reported on Form ADV as a private fund.

Specifically, the proposed changes to Question 9 would limit trading vehicles that must be

identified by name and legal entity identifier (“LEI”), if any, to those that are (i) listed or required to

be listed on Section 7.B. of Schedule D of the adviser’s or another adviser’s Form ADV, 68 or (ii)

included or required to be included in a response to Questions 27, 28, 42, 43, or 44 of the Form PF,69

which require advisers to identify the relevant party (including any trading vehicles) that bears

counterparty and credit exposures. 70

The proposed changes would entail a conforming amendment to General Instruction 7 with the

same instruction limiting the scope of trading vehicles that must be identified in response to Question

9 to those that are listed on the adviser’s Form ADV or in response to Questions 27, 28, 42, 43 or 44.

As discussed above, the broad definition of “trading vehicle” may cover passive entities commonly

Because trading vehicles may be partially owned by the filing adviser with another adviser, the proposed changes

would require the identification of any partially-owned trading vehicles reported on another adviser’s Form

ADV.

Questions 27 and 28 of Form PF must be completed separately for each hedge fund that an adviser advises.

Questions 42, 43, and 44 must be completed separately by large hedge fund advisers for each qualifying hedge

fund that they advise. These questions require the adviser to identify significant creditors or counterparties to

which a fund is exposed. For example, Question 42 requires the adviser to identify and provide information

about each creditor or other counterparty to which the reporting qualifying hedge fund owed an amount in

respect of cash borrowing entries which is equal to or greater than either (1) 5 percent of net asset value or (2) $1

billion. The proposed amendments would modify Questions 42 and 43. See infra section II.L. Amended

Questions 42 and 43 would still require advisers to identify significant creditors or counterparties to which a

fund is exposed. See infra section III.C.6.

The proposed change would not impact General Instructions 7 and 8 that direct advisers to look through trading

vehicles and to their holdings when responding to certain questions (e.g., Question 26, which requires advisers to

provided consolidated counterparty exposures of the reporting fund aggregated across all creditors and

counterparties).

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used in private fund structures but do not directly interact with the market in a manner that may pose

systemic risk such as by trading, taking on leverage, or bearing counterparty and credit exposures.

Furthermore, as emphasized by some filers, the burden on advisers of having to identify each passive

entity in the reporting fund’s structure that meets the broad definition of “trading vehicle” may be

significant.

Although the current instructions would have provided a more comprehensive visibility into

the wide variety of ways trading vehicles are incorporated into private fund structures, they would

have primarily captured passive trading vehicles, and reducing the scope of trading vehicles would

not materially affect the Commissions’ and FSOC’s systemic risk oversight and investor protection

efforts. The proposed changes to Question 9 would reduce the scope of trading vehicles that advisers

must identify to those that are more directly relevant and meaningful to the Commissions’ and

FSOC’s oversight and investor protection efforts. Section 7.B. of Schedule D of Form ADV requests

important information about the private funds managed by advisers but does not specify whether the

private funds reported therein are trading vehicles. The proposed changes would therefore facilitate

our staff’s ability to identify trading vehicles reported on Form ADV and the scope of trading

vehicles’ potential effects on systemic risk and investor protection.

Furthermore, the revised Question 9 would require advisers to identify those trading vehicles

that they have included in response to questions on the form that address how the reporting fund uses

trading vehicles to bear counterparty and credit exposures (Questions 27, 28, 42, 43, or 44). Hence,

any trading vehicle that incurs leverage or conducts trading or other activities as part of a hedge

fund’s investment activities resulting in significant exposure to creditors or counterparties is currently

identified by advisers in those questions and would therefore continue to be included in Question 9

under the proposed change.

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Trading vehicles included in response to these questions (which may overlap with those

reported on Form ADV) would provide the Commissions and FSOC with transparency into the

reporting fund’s risk profile and interconnectedness of private funds with the broader financial

services industry. Moreover, although we propose to limit the scope of trading vehicles that must be

specifically identified, General Instructions 7 and 8 would continue to require advisers to look

through certain trading vehicles and to their specific holdings, which would capture their counterparty

and creditor exposures. 71 These proposed changes would therefore not have a significant effect on the

Commissions’ and FSOC’s ability to assess relevant information for purposes of their risk assessment

and investor protection efforts, as the form would continue to obtain relevant information about

operationally active trading vehicles that do engage in activities that could impact the broader

financial services industry. 72

We request comment on the proposed changes to Question 9 of Section 1b:

26. Would the proposed changes to Question 9 sufficiently alleviate burdens on private fund

advisers?

27. Do you agree that the current definition of “trading vehicle” covers entities that do not

directly interact with the market in a manner that may pose systemic risk such as by trading,

taking on leverage, or bearing counterparty and credit exposures? Would the proposed

changes to Question 9 result in the collection of information about trading vehicles necessary

and appropriate in the public interest and for the protection of investors, or for the assessment

of systemic risk?

See proposed General Instructions 7 and 8 of Form PF.

See infra section III.C.6 for a more detailed discussion of benefits and costs of the proposed changes to Question

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28. Would the proposed changes to Question 9 result in certain trading vehicles that are necessary

to assess systemic risk not being identified in the form? Should such trading vehicles continue

to be identified in the form? If so, which ones?

29. Should we instead amend Form PF so that private fund advisers are not required to identify

any trading vehicles? Is the identification of trading vehicles relevant to the assessment of

systemic risk? Why or why not?

Eliminate Form PF Question 23(c) Volatility Reporting

The Commissions propose to eliminate Question 23(c) in its entirety for all private fund

filers. 73 Question 23(c) requires private funds to report additional performance-related information if

the adviser calculates a market value on a daily basis for any position in the reporting fund’s

portfolio. Such information includes: (1) the “reporting fund aggregate calculated value” at the end of

the reporting period; (2) the reporting fund’s volatility of the natural log of the “daily rate-of-return”

for each month of the reporting period; (3) whether the daily return rates are reported to current or

prospective investors; and (4) whether the reporting fund had one or more days with a negative daily

rate of return during the reporting period and related information.

We added Question 23(c) in the 2024 amendments to allow the Commissions and FSOC to

compare return volatility more accurately across different private fund types to identify market

trends, for systemic risk assessment, and for investor protection efforts. 74 This measure quantifies the

degree to which a portfolio's logarithmic returns fluctuate around their average, with higher values

indicating greater risk of large gains or losses and uncertainty in an investment’s value.

See Form PF section 1(b), Item C, Question 23(c)(i), (ii), (iii), and (iv) (“Question 23(c)”). We also propose to

remove any other references to Question 23(c) throughout the form.

See 2024 Form PF Adopting Release at section II.B.2.

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However, during implementation of this new question, it is our understanding that numerous

advisers encountered challenges and significant costs in preparing to respond to this question. Some

advisers calculate this information in the ordinary course of their business for certain funds but not all

private funds, or only at the level of the master fund. Other advisers use an internal methodology that

does not necessarily align with what we ask under Question 23(c), so they have had to design

complicated and bespoke calculations based on approximations of the same data points. Industry

members have further pointed out that there are many investing strategies involving less liquid or

illiquid assets that have less volatility and could mute or otherwise skew volatility data, so capturing

intra-month volatility about them is less valuable but more burdensome, even if they can be reported.

We now propose to delete Question 23(c). Based on our review, the data captured by other

questions in the form can assist in contextualizing performance-related volatility, such as the monthly

performance reporting in Question 23(a) and (b) or extraordinary losses reported in current reports. 75

Although deleting Question 23(c) would result in less detailed performance-related volatility

information, such that the Commissions and FSOC may lose insight into significant performance

volatility swings occurring on an intra-month basis, intra-month performance-related data for less

liquid or illiquid investment strategies can have limited utility when evaluating performance

volatility.76 Further, we understand that funds are making assumptions in calculating this information,

which undermines its comparability.

Given the burdens associated with calculating this information, and that information related to

performance-related volatility can be gathered from other existing parts of the form, we propose to

eliminate Question 23(c) from Form PF.

See Form PF section 5, Item B and Form PF Glossary of Terms (definitions of “holding period return” and “daily

rate-of-return”).

See infra section III.C.7 for a more detailed discussion of benefits and costs of eliminating Question 23(c).

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We request comment on the proposed removal of Question 23(c):

30. Should the Commissions eliminate Question 23(c)? Why or why not?

31. Would the proposed deletion of Question 23(c) impede our ability to appropriately collect

information necessary and appropriate in the public interest and for the protection of

investors, or for the assessment of systemic risk? Why or why not?

32. Alternatively, should we move Question 23(c) to section 2? Is it important to capture this

information regarding qualifying hedge funds? Why or why not? Do you agree that data

captured by other questions in the form can assist in contextualizing performance-related

volatility?

33. Do advisers calculate a daily market value for certain fund portfolios or strategies? If yes, is it

an estimated market value?

34. Do advisers calculate the volatility of the natural log of the daily rate-of-return for a reporting

fund, computed as the standard deviation of the natural log of one plus each of the daily ratesof return, on either a monthly or quarterly basis? If not, what are the challenges encountered

by advisers in calculating this information for a reporting fund?

35. Is it easier to track this information for certain types of funds or fund strategies compared to

others?

36. Would removing Question 23(c) sufficiently alleviate burdens on private fund advisers?

37. Alternatively, should we move Question 23(c) to section 2 so that only large hedge fund

advisers must complete it? Why or why not?

Eliminate Certain Trading and Clearing Reporting

We propose to eliminate certain trading and clearing reporting. Specifically, we propose to

eliminate the requirements to report the value of positions at the end of the reporting period in

Question 29(ii) and Question 30(b). Currently, all filers that advise hedge funds must report how they

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use trading and clearing mechanisms in Questions 29 and 30 for each hedge fund they advise,

including the value of their reporting fund’s positions at the end of the reporting period. The

Commissions adopted this requirement in an effort to provide the Commissions and FSOC with data

that can be more efficiently compared and aggregated among advisers and other data sources. 77

However, filers have expressed concern that they do not otherwise calculate the value of positions at

the end of the reporting period by trading mode for each position using the calculations Form PF

requires, and it is burdensome to track, calculate, and report such data solely for purposes of

Questions 29(ii) and 30(b). If we remove Questions 29(ii) and 30(b), Questions 29 and 30,

nonetheless, would continue to require all filers to report the value the reporting fund traded during

the reporting period, specified by instrument category and trading mode, which should be sufficient

for purposes of evaluating use of trading and clearing mechanisms across hedge fund advisers.

Furthermore, FSOC and the Commissions could infer the value of the positions at the end of the

reporting period requested in Questions 29(ii) and 30(b) from Question 32. For example, Question

32(a) requires reporting of various sub-asset classes related to listed and unlisted equity which gives

FSOC and the Commissions an indication as to whether the securities were traded on an exchange or

over the counter. Accordingly, we are proposing to remove the requirements to report the value of

positions at the end of the reporting period in Question 29(ii) and Question 30(b) because we are

concerned that the data aggregation and comparison benefits of this reporting may not be justified by

the burdens. 78

The Commissions also propose to remove erroneous and unnecessary instructions in

Questions 29. The current instructions in Question 29 provide that the “value traded” for certain

2024 Form PF Adopting Release at n.249 and accompanying text.

See also infra section III.C.8 for a more detailed discussion of benefits and costs of the proposal to revise

Questions 29 and 30.

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instruments is the total value, but then erroneously require filers to calculate the total value by using a

weighted average. We propose to remove this instruction, which would remove the error. 79 With this

correction, the specific instructions about how to calculate value traded for proposed Questions 29

and 30 would be unnecessary because General Instruction 15 and the table would sufficiently instruct

advisers on how to report the value traded. Therefore, this proposed change would simplify the form,

by not repeating the instructions. We also propose to remove the specific instructions for column (ii).

These instructions would be no longer relevant because we propose to remove column (ii).

We request comment on the proposal to revise Questions 29 and 30:

38. Should we revise Questions 29 and 30, as proposed?

39. Should we eliminate the requirement for advisers to report the value of positions at the end of

the reporting period in Questions 29 and 30, as proposed? Do you agree that the information

reported in other requirements in Questions 29 and 30 is sufficient to analyze data on trading

and clearing mechanisms?

40. Do you agree with our characterization of the benefits and burdens that Questions 29 and 30

present? Are there more, less, or additional types of benefits or burdens? Please quantify the

burdens.

41. Should we remove the specific instructions for calculating “value traded,” as proposed? Does

General Instruction 15 and the table itself sufficiently instruct filers about how to report value

traded? Is there a clearer way to instruct filers about how to calculate value traded? Or is there

a more appropriate calculation that the instructions should use? For example, should the

instructions to Question 29 direct filers to use the gross notional values for options and

Proposed Question 29.

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interest rate derivatives in addition to other derivatives, rather than the calculations that

General Instruction 15 specifies?

42. Is there a clearer way to instruct filers about how to categorize each trade into the value traded

column? For example, if a bond is traded through a registered alternative trading system,

should that be included in the regulated exchange category or over the counter?

Eliminate Form PF Question 32(b)(2) Adjusted Exposure Reporting Based on

Internal Methodology

The Commissions propose to eliminate Question 32(b)(2) for large hedge fund advisers. 80 The

Commissions added Question 32(b) to Form PF in 2024 to require advisers to report the adjusted

exposure of long and short positions for each sub-asset class in which a fund has a reportable

position. 81 At that time, the Commissions explained that gross exposure reporting by itself presents an

incomplete picture that poses a significant data gap for systemic risk analysis. Question 32(b)

requires large hedge fund advisers to report adjusted exposures in two ways. In Question 32(b)(1),

advisers have to calculate and report adjusted exposure of long and short positions for each sub-asset

class by netting positions that have the same underlying reference asset across instrument type and,

for fixed income positions, within the same term using the following maturity buckets: 0-1 year, 1-2

years, 2-5 years, 5-10 years, 10-15 years, 15-20 years, and 20+ years.

In Question 32(b)(2), if, under its methodologies for internal reporting and reporting to

investors, an adviser does not net all positions across all instrument types in monitoring the economic

exposure of the reporting fund’s investment positions, then the adviser must report adjusted exposure

based on its internal methodology; the adviser must also describe in Question 4 how its internal

See Form PF section 2, Item B, Question 32(b)(2). We also propose to remove any other references to Question

32(b)(2) throughout the form.

See 2024 Form PF Adopting Release at section II.C.2.a.

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methodology differs from the calculations required in Question 32(b)(1). At the time, the

Commissions explained that this additional information in Question 32(b)(2) would provide better

insight into how these advisers assess the economic exposure of their reporting fund’s portfolio, while

still ensuring an adviser provides information that supports the Commissions’ and FSOC’s ability to

aggregate and compare the data across funds. 82

After the adoption of the 2024 amendments, filers raised concerns that Question 32(b)(2) is

substantially duplicative of Question 32(b)(1) and therefore unnecessarily burdensome to produce.

They stated that these two sub-questions require them to calculate and report adjusted exposure for

each sub-asset class in which the fund holds positions twice with non-meaningful differences in risk

information conveyed.

Upon review, we agree that Question 32(b)(2), given its similarity to what funds will likely

report under Question 32(b)(1), does not appear sufficiently necessary to justify the burdens

associated with this additional reporting. While adjusted exposure reporting continues to be important

for FSOC’s assessment of systemic risk, eliminating Question 32(b)(2) in consideration of the

concerns raised by filers, as proposed, would help further alleviate burdens on large hedge fund filers

by removing duplicative reporting that does not materially build upon the quality or usefulness of

data already received from Question 32(b)(1). 83

Relatedly, we propose to delete the word “counterparties” from the last sentence in Question

32(b)(1). This instructional sentence provides that, in reporting adjusted exposure under Question

32(b)(1), the fund may net counterparties consistent with the information it reports internally and to

current and prospective investors. Based on discussions with filers, we understand that the inclusion

of “counterparties” in this sentence has created confusion because netting in this section is intended

See id.

See infra section III.C.9 for a more detailed discussion of benefits and costs of eliminating Question 32(b)(2).

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to be associated with exposures rather than limiting netting specifically to counterparties. Moreover,

combined with the elimination of Question 32(b)(2), this deletion would be a conforming change to

simplify the adjusted exposure calculations.

We request comment on the proposal to eliminate Question 32(b)(2):

43. Should the Commissions eliminate Question 32(b)(2)? Why or why not?

44. Would the proposed deletion of Question 32(b)(2) impede our ability to appropriately collect

information about adjusted exposure in qualifying hedge funds necessary and appropriate in

the public interest and for the protection of investors, or for the assessment of systemic risk?

Why or why not?

45. Would removing Question 32(b)(2) meaningfully alleviate burdens on large hedge fund

advisers?

46. If Question 32(b)(2) is retained, should it be modified? If so, how?

47. Should the format of Question 32(b)(1) (and Question 32(b)(2) if it is retained) be revised for

clarity (for example, by using charts instead of sentences, or putting instructions and

responses in different colors like the PQR form)?

Eliminate Form PF Question 34 Monthly Asset Turnover Reporting

The Commissions propose to eliminate Question 34 for large hedge fund advisers. 84 Question

34 requires advisers to report the value of turnover in certain asset classes (including listed equities,

corporate bonds, sovereign bonds, as well as various types of derivatives and consolidated foreign

exchange and currency swaps) in their hedge funds’ portfolios for each month during the quarterly

reporting period.

See Form PF section 2, Item B, Question 34. We also propose to remove any other references to Question 34

throughout the form.

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The Commissions included this question on the original 2011 Form PF (then Question 27) to

provide an indication of a large hedge fund adviser’s frequency of trading in particular asset class

markets and the amount of liquidity hedge funds contribute to those markets. 85 We then amended

Question 34 in 2024 in two ways. First, in connection with the move to disaggregate reporting, we

required reporting turnover on a per fund basis explaining that this change would provide more

detailed information to the Commissions and FSOC while simplifying reporting because advisers do

not generally aggregate turnover-related information among funds. 86 Second, we added new

categories to better capture turnover of potentially relevant securities. We referenced how, during the

March 2020 COVID-19-related market turmoil, we were unable to obtain a complete picture of

market activity relating to treasuries and treasury futures given that turnover reporting was highly

aggregated across funds.

While the turnover of specific asset classes can be helpful to identify the frequency of hedge

fund trading activity in those asset classes, we have observed from our review that turnover data can

be an imprecise signal of systemic risk or market turmoil. 87 Asset turnover might simply reflect that

many large hedge funds make frequent trades as part of an investment strategy rather than suggesting

issues in a given market. Conversely, a reduction in asset turnover could reflect a strategy responding

to normal market conditions as opposed to an episode of stress in a market where a reduction in

liquidity constrains a fund’s trading. Additionally, ensuing discussions with industry members have

revealed unanticipatedly high burdens in monitoring and producing the data to complete Question 34.

For example, because a large hedge fund can complete upwards of ten thousand trades in a single day,

See 2011 Form PF Adopting Release at section II.C.2.a.

See 2024 Form PF Adopting Release at section II.C.2.d.

See infra section III.C.10 for a more detailed discussion of benefits and costs of eliminating Question 34.

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tracking so many transactions and breaking them down on a per-fund basis is time- and laborintensive.

Furthermore, we are also able to approximate the data collected in Question 34 based on filers’

responses to other questions, such as the asset class exposure table in Question 32, which while not

providing the frequency of trading in particular asset class markets, does provide the size of their

exposures in those markets, combined with the information about investment strategies reported in

Question 25, 88 as some hedge fund strategies inherently involve higher trading activity. In addition,

certain information relating to trading activity is still provided in Question 29. 89

Therefore, removing Question 34 should reduce the burdens for filers while the Commissions

can rely on other questions for information relating to hedge funds with significant exposures in

various asset classes where there may be significant trading and liquidity provision.

We request comment on the proposal to eliminate Question 34:

48. Should the Commissions eliminate Question 34 on monthly asset turnover information? Why

or why not?

49. Would the proposed deletion of Question 34 impede our ability to collect information

necessary and appropriate in the public interest and for the protection of investors, or for the

assessment of systemic risk? Why or why not?

50. Would removing Question 34 meaningfully alleviate burdens on large hedge fund advisers?

51. Do you agree that information from Questions 25, 29, and 32 would help FSOC assess and

monitor turnover or trading activity and liquidity provision of qualifying hedge funds for

systemic risk implications? Are there any other alternative ways?

See Form PF section 1c, Item B, Question 25.

Question 29 (as proposed) would still require reporting about the volume of transactions for certain asset classes

during intra-quarter periods.

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Simplify Industry Concentration Reporting in Form PF Question 36

The Commissions propose to amend Form PF Question 36 by permitting filers to report at a

simpler level of classification within the NAICS code system. 90 Form PF Question 36 requires filers

to report the relevant industry exposures of their reporting funds using NAICS codes. The

Commissions added Question 36 in 2024 to “allow for identification of industry concentrations and

help assess the potential impact of market events on industries.” 91 NAICS codes are used to describe

a company’s primary business activity and principal source of revenue and generally can be specified

up to six digits. The full set of NAICS code options is free to access online. However, some

investment instruments may not have codes readily available, as discussed below. NAICS codes are

often the standard used by certain Federal agencies for classifying entities by industry. 92 Currently

filers responding to Question 36 are required to report at the six-digit level, national industry, NAICS

code.

The purpose of requiring advisers to respond to this question based on the NAICS codes is to

provide insight into hedge funds’ industry exposures in a standardized way to allow for comparability

among funds and meaningful aggregation of data to assess overall industry-specific concentrations. In

adopting this question, we stated that NAICS codes would be useful for monitoring systemic risk,

particularly if multiple funds have significant concentrations in industries that are experiencing

periods of stress or disruption. 93

See Form PF Question 36 and Form PF Glossary of Terms. The five NAICS code classification levels are: (1)

sector two-digit code, (2) subsector three-digit code, (3) industry group four-digit code, (4) NAICS industry fivedigit code, (5) national industry six-digit code.

2024 Form PF Adopting Release at section II.C.2.d.

See id. (referencing SBA Small Business Size Regulations, 13 CFR 121.101 (2023)).

See id. SEC staff also published an FAQ attempting to clarify how filers can better respond to this question. See

SEC staff Form PF Frequently Asked Questions; Form PF: Question 36 (updated Apr. 4, 2025), available at

https://www.sec.gov/rules-regulations/staff-guidance/division-investment-management-frequently-askedquestions/form-pf-faq.

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However, through subsequent discussions with industry members, we have come to

understand certain difficulties in reporting the NAICS codes, particularly at the six-digit national

industry level. The industry generally does not use NAICS codes for reporting industry concentration

to investors or counterparties. In addition, certain instruments, including foreign instruments, do not

have a NAICS code. We heard from multiple industry members who more commonly use the

Bloomberg Industry Classification Standard (“BICS”) or Global Industry Classification Standard

(“GICS”), though the BICS and GICS codes are not publicly available and involve license fees and

other costs and expenses to access them. As a result, in order to comply with the NAICS code

requirement, advisers would need to assign a NAICS code to an instrument that does not have one,

which generally would require advisers to develop data systems or pay third parties to supply or track

this information and could lead to inconsistent reporting across filers. However, Form PF already

requires the use of NAICS codes in Questions 81 and 82, so some filers already use NAICS codes.

Additionally, we understand that allowing advisers to report NAICS industry codes at less granular

levels would reduce burdens for filers because less specific options would result in less time and

precision needed to assign a code. For example, this proposed change would significantly streamline

filers’ options by allowing them to select from approximately twenty two-digit sector NAICS codes

instead of the more than one thousand six-digit national industry codes as currently required. The

proposed change would continue to maintain the Commissions’ and FSOC’s ability to gain insight

into hedge fund industry exposures, including concentrated exposures, at a level that would facilitate

the assessment of systemic risk, while meaningfully reducing reporting burdens for filers. 94

Therefore, the Commissions propose to amend Question 36 by giving filers the flexibility to

choose any level of classification within the NAICS hierarchal code system. We believe that this

See infra section III.C.11 for a more detailed discussion of benefits and costs of simplifying industry

concentration reporting in Question 36.

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change would allow us to continue receiving important industry-specific exposure data while

reducing the burdens and costs filers face in responding to this question.

We request comment on the proposed change to the NAICS code reporting requirement:

52. Should the Commissions allow filers to use their preferred specificity of NAICS codes

between two and six digits? Why or why not?

53. Would two-digit NAICS codes sufficiently allow FSOC to monitor for industry exposure to

systemic risk?

54. Would allowing for additional NAICS code levels sufficiently alleviate burdens on private

fund advisers?

55. Is there an alternate classification standard, such as BICS or GICS, that would be easier or

less expensive for filers to use in providing this information? Why or why not? If we were to

switch to a different classification system, should we also do so for Questions 81 and 82?

56. Should the Commissions create a list of categories from which filers can select their most

appropriate industry, similar to how commodity pool operators file Form PQR? 95 If so, what

categories should we use?

57. Is it more difficult to obtain NAICS code information for certain instruments (e.g. broadly

syndicated loans) as compared to others? If yes, please describe.

58. Should this question be deleted entirely? Why or why not?

Eliminate Certain Questions Concerning Qualifying Hedge Funds’ Exposures to

Reference Assets.

We propose to remove Questions 39 and 40, which require large hedge fund advisers to report

detailed information about their qualifying hedge funds’ monthly portfolio exposure to reference

See, e.g., Pool Quarterly Report for Commodity Pool Operators, Question 11 Pool Schedule of Investments,

available at https://www.nfa.futures.org/electronic-filing-systems/CPO-PQR-Template-Help-Text.pdf.

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assets. 96 To mitigate the impact of losing this data, the SEC proposes to add streamlined exposure

reporting to section 5, Item B.

Question 32(b)(1) requires large hedge fund advisers to report, for each qualifying hedge fund

they advise except as otherwise instructed, the reporting fund’s exposure to specified sub-asset

classes for each month of the reporting period adjusted by netting positions in the same underlying

reference asset across instrument type, among other things. In addition, Question 39 requires large

hedge fund advisers to report certain information about their qualifying hedge funds’ long and short

netted exposure to reference assets at the end of each month in the reporting period. In particular, it

requires the following reporting:

(1) the total number of reference assets to which the reporting fund holds long and short

netted exposure;

(2) the percent of net asset value represented by the aggregated netted exposures of reference

assets with the top five long and short netted exposures; and

(3) the percent of net asset value represented by the aggregate netted exposures of reference

assets representing the top ten long and short netted exposures.

To accommodate this proposed change, we also propose to remove “netted exposure” from the Glossary of

Terms because Form PF would no longer use that term without Questions 39 and 40. We also propose to remove

any other references to Questions 39 and 40 throughout the form.

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Question 40 requires large hedge fund advisers to report certain detailed information about

their qualifying hedge funds’ monthly gross exposure, among other things, to reference assets that

equal or exceed any of the following thresholds: 97

(1) One percent of the net asset value, if the reference asset is a debt security and the fund’s

gross exposure to it exceeds 20 percent of the size of the overall debt security issuance;

(2) One percent of the net asset value, if the reference asset is a listed equity and the fund’s

gross exposure to it exceeds 20 percent of average daily trading volume measured over 90

days preceding the reporting date; or

(3) Either five percent of the fund’s net asset value or $1 billion.

The Commissions adopted Question 39 to provide a holistic view of a reporting fund’s

portfolio concentration and provide insight into the extent of a reporting fund’s portfolio

concentration and large exposures to any reference assets. 98 The Commissions adopted Question 40

to improve their ability to assess the magnitude of hedge fund portfolio concentration, as well as to

identify directional exposure. The Commissions also stated that Question 40 was designed to allow

the Commissions and FSOC to link the information reported in Question 40 to exposure reporting in

Question 32, which is designed to give the reported data added context and facilitate understanding of

a fund’s investment portfolio and assessment of any implications for systemic risk and investor

protection purposes. The Commissions stated that the combination of information reported in

Large hedge fund advisers must report the following: (1) the dollar value (in U.S. dollars) of all long positions

with legal and contractual rights that provide exposure to the reference asset; (2) the dollar value (in U.S. dollars)

of all short positions with legal and contractual rights that provide exposure to the reference asset; (3) the netted

exposure to the reference asset (as defined by current Question 39 Instructions); (4) the sub-asset class and

instrument type; (5) the title or description of the reference asset; (6) the reference asset issuer (if any) name and

LEI; (7) the CUSIP (if any), and at least one of the following other identifiers: ISIN, Ticker if ISIN is not

available, other unique identifier (if ticker and ISIN are not available); (8) for reference assets with no CUSIP or

other identifier, advisers must describe the reference asset; (9) if the reference asset is a debt security, size of

issue; (10) if the reference asset is a listed equity, average daily trading volume, measured over 90 days preceding

the reporting date; and (11) the FIGI (optional).

See generally 2024 Form PF Adopting Release at section II.C.2.a for a discussion of why the Commissions

adopted Questions 39 and 40.

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Question 32 and Question 40 is designed to, among other things, provide better insight into a

qualifying hedge fund’s investment approach and whether it is taking on concentrated positions,

potentially with leverage, and assess whether or not a qualifying hedge fund’s activities may have

systemic risk or investor protection implications.

Based on filer feedback, however, we are concerned about the burdens associated with

collecting the information for Questions 39 and 40. Both Questions 39 and 40 require advisers to use

specific methodologies to calculate and report monthly exposures to reference assets, and Question

40 includes three separate reporting thresholds that can be difficult to assess in practice due to the

multiple steps embedded in each threshold and multiple data inputs required for each step. Filers have

expressed concern that they do not otherwise create and maintain data using the specific calculations

set forth in Questions 39 and 40, and it is burdensome to calculate the multiple data points necessary

to determine the population of reportable reference assets, and report such data solely for purposes of

Form PF. For example, some hedge funds may have dozens of positions that must be analyzed both

collectively when calculating the thresholds and separately if the reference asset is reportable under

Questions 40. Specifically, the first and second threshold require multiple calculations for a

potentially significant number of positions and the calculations require inputs such as total issuance

size and an average daily trading volume metric that may not be tracked or collected in the ordinary

course of the filer’s management of the portfolio. We are also concerned that these calculation

challenges could create reliability and comparability challenges that could undermine the utility of

the data.

Questions 39 and 40 were intended to provide a holistic view of a reporting fund’s portfolio

concentration based on commonly used industry metrics for assessing portfolio concentration

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levels. 99 However, other data reported on the form, combined with the SEC’s proposed enhanced

current reporting, should sufficiently allow the Commissions and FSOC to assess portfolio

concentration in furtherance of systemic risk assessment and investor protection efforts, as applicable.

We will still receive information through responses to Question 32 on adjusted investment exposures

netted across instrument type representing the same reference asset by sub-asset class, which provides

information on concentrated exposures.

In addition, the SEC proposes to add an additional reporting field to section 5, Item B, which

requires large hedge funds to file a current report no later than 72 hours after their qualifying hedge

fund experiences an extraordinary investment loss. 100 Under the SEC’s proposal, if a large hedge fund

adviser files such a current report, it would be required to describe the largest exposure contributing

to the reported loss, including the dollar amount and certain identifying information. 101 This proposed

change is tailored to help ensure Form PF collects sufficient information to assess systemic risk and

further investor protection efforts related to qualifying hedge funds’ concentrated portfolio exposures

without the significant burdens associated with completing Questions 39 and 40. 102 Therefore,

Questions 32, along with proposed section 5, Item B, should help ensure Form PF collects

information sufficient to assess systemic risk of exposures and further investor protection efforts.

We request comment on the proposal to remove Questions 39 and 40, and the SEC requests

comment on the proposal to add the proposed requirement to section 5, Item B:

See 2024 Form PF Adopting Release at n.329 and accompanying text.

100

See proposed section 5, Item B. In connection with this proposed change, the SEC proposes to redesignate

Questions 5-4 through 5-7 to accommodate the additional reporting field.

101

Identifying information would include a subset of information that advisers would have reported in Question 40,

including the sub-asset class, instrument type, title or description of the asset, issuer name, LEI (if any), CUSIP

(if any), if no CUSIP, then at least one of the following other identifiers: ISIN, Ticker if ISIN is not available,

other unique identifier.

102

See also infra section III.C.12 for a more detailed discussion of benefits and costs of these proposed

amendments.

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59. Should we remove Questions 39 and 40, as proposed?

60. Do you agree with our characterization of the benefits and burdens that Questions 39 and 40

present? Are there more, less, or additional types of benefits or burdens? Please quantify the

benefits and burdens.

61. Instead, should we keep either Question 39 or 40, but revise them to make them less

burdensome? For example, should we keep Question 40, but simplify or raise the reporting

thresholds? Please provide example language. Should we reduce the reporting frequency from

monthly to quarterly?

62. Is there an alternative way to collect information on concentration at the portfolio level and

market level? Which is more important for systemic risk assessment? Is there an alternative

way to collect information on position-level exposures to reference assets that would aid

FSOC in assessing systemic risk and the SEC’s investor protection efforts, but would be less

burdensome than Questions 39 and 40, and better than our proposed approach of relying on

adjusted exposure information reported under Question 32 combined with current reporting

with the proposed revision to extraordinary investment loss event question?

63. Should the SEC add a requirement to the current report in section 5, Item B, as proposed? If

the Commissions do not eliminate Questions 39 or 40, should the SEC nonetheless adopt the

proposed requirements in section 5, Item B? Should the SEC add more or modify any

proposed requirements to the current report in section 5, Item B?

64. Do you agree that proposed section 5, Item B, together with Question 32 would provide

sufficient information to assess systemic risk of exposures? Would Question 32 alone, without

proposed section 5, Item B provide sufficient information to assess systemic risk of

exposures? If so, should the Commissions eliminate Questions 39 and 40 without amending

section 5, Item B?

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Simplify Large Hedge Fund Adviser Counterparty Exposure Reporting

The Commissions propose to simplify the reporting on counterparty exposures for large hedge

fund advisers.

Specifically, the Commissions propose to remove Question 41 from section 2 and to require

advisers to qualifying hedge funds to complete the simpler consolidated counterparty exposure table

in Question 26, which all filers complete for hedge funds they advise, except qualifying hedge funds

would provide monthly data points. For more detailed information on counterparty exposures, the

Commissions would instead rely on the data filed in response to Questions 42 and 43, which provide

information on borrowing arrangements with significant counterparties and creditors of large hedge

funds.

To retain important information relating to counterparty exposure for all borrowings to

significant counterparties and creditors of qualifying hedge funds, which is relevant to monitoring

and assessing systemic risk, the Commissions propose to amend Question 42 to require large hedge

fund advisers to report on all borrowings from significant counterparties and creditors of qualifying

hedge funds rather than only cash borrowings and to categorize those borrowing entries by type.

Furthermore, the Commissions request comment on ways to alleviate burdens on advisers

with respect to netting counterparty exposures in response to certain questions. 103 Through these

actions, the Commissions seek to better balance filing burdens on advisers against the Commissions’

and FSOC’s need to obtain clear and comparable data regarding hedge funds’ use of collateral and

credit exposure to counterparties.

103

See Question 26, Question 27, Question 28, Question 42 and Question 43 of Form PF.

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The Commissions also propose the following minor revisions to the instructions in Question

42, none of which will substantively change the form: (1) correcting a reference to a column (from

column (c) to column (b)) in subsection (b) where the LEI for a counterparty should be provided, and

(2) removing a sentence that instructs filers to provide a counterparty’s legal name and LEI in

subsection (b) in columns (vi) and (vii), which do not exist in subsection (b).

In 2024, the Commissions adopted amendments to Form PF that included the new

consolidated counterparty exposure tables, which were designed to collect specific data on hedge

funds’ borrowing and financing arrangements with central clearing counterparties (“CCPs”) and other

counterparties. 104 The new tables require advisers to report a hedge fund’s borrowing, lending, and

similar transactions with creditors and other counterparties by type of borrowing, lending or

transaction (e.g., unsecured, secured borrowing and lending under a prime brokerage agreement,

secured borrowing and lending via repo or reverse repo, other secured borrowing and lending,

derivatives cleared by a CCP, and uncleared derivatives), 105 and the collateral posted or received by a

reporting fund in connection with each type of borrowing, lending or other transaction. The

consolidated counterparty tables were designed to enhance the Commissions’ and FSOC’s

understanding of hedge funds’ counterparty risk exposure, which is needed for systemic risk

assessment because of the potential contagion risks of both the reporting fund and counterparty

failure. 106

For hedge funds other than qualifying hedge funds, the consolidated counterparty exposure

table in section 1c (Question 26) collects the reporting fund’s borrowing and collateral received and

104

See Question 26 and Question 41 of Form PF; see generally 2024 Form PF Adopting Release at section II.B.3 and

section II.C.2 for a discussion of the Commissions’ rationale for the new consolidated counterparty exposure tables.

105

See current Question 26 and Question 41 of Form PF.

106

See 2024 Form PF Adopting Release at section II.B.3.

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lending and posted collateral aggregated across all creditors and counterparties as of the end of the

reporting period. 107 Qualifying hedge funds must complete a separate consolidated counterparty

exposure table in section 2 (Question 41), which requires additional detail. Specifically, unlike the

table in Question 26, the table in Question 41 directs advisers to qualifying hedge funds to classify

each type of borrowing by creditor type (i.e., U.S. depository institution, U.S. creditors that are not

depository institutions, and non-U.S. creditors) and to provide additional classifications of collateral

by type (e.g., by breaking out government securities from other securities, and identifying other types

of collateral or credit support (including the face amount of letters of credit and similar third party

credit support)). 108 The table in Question 41 also requires reporting of the qualifying hedge fund’s

aggregated borrowing and collateral received and lending and posted collateral as of the end of each

month of its reporting period, as opposed to as of the end of the reporting period required in Question

26 for smaller hedge funds. Furthermore, advisers to qualifying hedge funds must report in this table

the expected increase in collateral required to be posted by the reporting fund if the margin increases

by one percent of position size for each type of borrowing or other transaction. 109 The Commissions

adopted this requirement to allow for an assessment of qualifying hedge funds’ vulnerability to

changes in financing costs and identification of funds that are most sensitive to potential margin

changes. 110 The requirement was also designed to provide a standardized way to obtain data on funds’

vulnerability to margin increases that is easy to scale up for analysis purposes and allows for uniform

107

See General Instruction 9 of Form PF for applicable reporting periods for large hedge fund advisers and all other

advisers. Large hedge fund advisers must update the Form PF within 60 calendar days after the end of each

calendar quarter. All other advisers must file annual updates to their Form PF within 120 days after the end of

their fiscal year.

108

See Question 41 of Form PF. See also 2024 Form PF Adopting Release at section II.C.2.b.

109

See Form PF Question 41, subsections (b)(vii), (c)(vi), (d)(vi), (e)(vi), and (f)(viii). In some subsections, the

instructions appear to mistakenly require advisers to report the expected change in collateral if the required

margin increases by one percent, rather than by one percent of the position size.

110

2024 Form PF Adopting Release at section II.C.2.b.

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comparisons across hedge funds to see which funds have lockup agreements and which funds do

not. 111

Since the adoption of the 2024 amendments, filers have highlighted significant challenges

associated with completing the new consolidated counterparty exposure tables, particularly the table

in Question 41 which requires more granular reporting by collateral type (e.g. government securities,

securities and other collateral) for each type of borrowing, lending or transaction (e.g. borrowing via

prime brokerage or repo and reverse repo) than Question 26. Several filers voiced concerns that prime

brokers report collateral on a pooled basis to funds and do not generally unbundle classifications of

collateral by asset type. 112 For example, prime brokers may not break out government securities from

other types of securities when reporting collateral, as required by Question 41. As such, the

operational burdens of providing classifications of collateral for each type of borrowing, lending or

transaction may be particularly pronounced for Question 41 because it requires additional unbundling

and tracing of collateral in a manner that does not align with the typical practices of prime brokers.

Filers also expressed that it is burdensome to report the expected increase in collateral from the one

percent margin increase, because it necessitates hundreds or potentially even thousands of

calculations. Furthermore, filers emphasized the significant difficulty of interpreting and responding

with granular accuracy to the detailed sub-parts of Question 41.

In responding to these concerns, the Commissions propose to remove Question 41 from

section 2 and to instead require qualifying hedge funds to complete the simpler consolidated

counterparty exposure table in Question 26. By completing the table in Question 26, large hedge fund

advisers to qualifying hedge funds would report each type of collateral based on fewer classifications

111

Id.

112

See, e.g., AIMA Letter II.

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within each borrowing, lending or transaction type in the consolidated counterparty exposure table. 113

Moreover, qualifying hedge funds would not be required to report the expected increase in collateral

from the one percent margin increase that is currently required to be reported in Question 41. 114

Unlike other hedge funds, however, qualifying hedge funds would be required to report in

Question 26 collateral posted and received as of the end of each month of their reporting period,

consistent with the reporting intervals in the table in the current Question 41. We propose to retain the

monthly reporting of collateral obligations for qualifying hedge funds because the size of large hedge

funds and therefore their broader interconnectedness to the financial markets merit more regular

reporting to aid the FSOC’s ability to monitor interim changes in exposures that may be relevant to

systemic risk assessment that are not visible from less than monthly data.

The elimination of Question 41 would not significantly diminish the Commissions’ and

FSOC’s ability to monitor systemic risk and protect investors because Questions 26, 42 and 43 along

with other questions on Form PF, would continue to facilitate the tracking of large hedge funds’

collateral practices and their credit exposure to counterparties as well as the exposure that creditors

and other counterparties have to large hedge funds. 115 For more detailed information on counterparty

exposures, the Commissions and FSOC would instead rely on the data filed in response to Questions

42 and 43, which, with certain proposed amendments specified below, would provide information on

113

But see proposed Question 18 of Form PF which requires all reporting funds to report the value of the reporting

fund’s total borrowings and to classify creditors by type (i.e., U.S. depository institutions, U.S. creditors that are

not U.S. depository institutions, and non-U.S. creditors).

114

See supra footnote 109 and accompanying text109.

115

See infra section III.C.13 for a more detailed discussion of the benefits and costs of the proposed changes to

counterparty exposure reporting by large hedge fund advisers, and infra section III.F.5 for the reasonable

alternatives considered.

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borrowing arrangements with significant counterparties and creditors of large hedge funds while

reducing reporting burdens associated with Question 41. 116

In connection with the proposal to remove Question 41, we propose a conforming amendment

to Question 18 in section 1b, which is required for all hedge funds, so that advisers to large hedge

funds must report there information regarding the value of the reporting fund’s total borrowings and

classify creditors by type (i.e., U.S. depository institutions, U.S. creditors that are not U.S. depository

institutions, and non-U.S. creditors). 117

We also propose amendments to conform Question 42 and Question 43 to the table in

Question 26, as responses to these questions are based on calculations performed to complete the

consolidated counterparty exposure table. 118 The conforming changes to subsection (a) of Question

42 would result in less burdensome breakdown of collateral required of the top five counterparties of

the reporting fund in response to both Questions 42 and 43.

116

See current Questions 42 and 43 of Form PF. Question 42 currently requires advisers, for each of their qualifying

hedge funds, to identify significant creditors and counterparties. In current subsection (a) of Question 42,

advisers must complete a detailed individual counterparty exposure table, which includes a break out of

borrowings and lending by type, for the top five creditors and counterparties to which the reporting fund owed

the greatest dollar amount in cash borrowing entries. In current subsection (b) of Question 42, advisers must

identify and provide less detailed information (for example, unlike subsection (a), current subsection (b) does not

require advisers to categorize borrowings by type) about creditors and counterparties (including CCPs) that were

not the top five listed in the individual counterparty exposure tables, but to which the reporting fund owed an

amount in respect of cash borrowing entries which is equal to or greater than either (1) 5% of the reporting

fund’s net asset value as of the data reporting date, or (2) $1 billion. As discussed below, the proposed changes to

Question 42 would direct advisers to report on all borrowings (as opposed to cash borrowing entries) from

significant counterparties and creditors of qualifying hedge funds. See proposed Question 42 of Form PF. In

current Question 43, advisers are required, for each of their qualifying hedge funds, to identify all counterparties

(including CCPs) to which a fund has net mark-to-market counterparty credit exposure after collateral that equals

or is greater than either (1) five percent of the fund’s net asset value or (2) $1 billion. As discussed below,

proposed changes to Question 43 would direct advisers to calculate net mark-to-market counterparty credit

exposure using borrowing entries (as opposed to cash borrowing entries) and lending entries (as opposed to cash

lending entries). See proposed Question 43 of Form PF and infra footnote 124.

117

See proposed Question 18 of Form PF.

118

See proposed Question 42 of Form PF. The individual counterparty exposure table in proposed Question 42

would remove references to the additional classifications of collateral that the consolidated counterparty

exposure table in Question 26 does not have. Revisions to Question 43, which flows from the individual

counterparty exposure table in Question 42, would be reflected in the schema for Question 43.

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Relatedly, we propose conforming amendments to amend instructions for Questions 42 and 43

as a result of the proposed elimination of the consolidated counterparty exposure table under

Question 41 as well as conforming amendments to certain definitions in the Form PF Glossary of

Terms to remove references to Question 41. 119

In addition to the removal of Question 41 and related conforming amendments discussed

above, the Commissions propose amendments to Question 42 and conforming changes to Question

43 in order to retain detailed information on counterparty exposures relevant to monitoring and

assessing systemic risk. 120 To retain information on the type of counterparty exposure for all

borrowings to significant counterparties and creditors of qualifying hedge funds, which is important

to monitoring and assessing systemic risk, the Commissions propose to amend Question 42 to require

large hedge fund advisers to report on all borrowings 121 rather than only cash borrowings, and to

categorize in subsection (b) of Question 42 the borrowing entries by type (i.e., unsecured borrowing,

secured borrowing (prime brokerage or other brokerage agreement), secured borrowing via repo and

reverse repo, other secured borrowing, derivative positions cleared and uncleared by a CCP) 122 from

all significant counterparties and creditors of qualifying hedge funds. 123 Relatedly, we propose

119

See proposed Form PF Glossary of Terms (definitions of “cash borrowing entries,” “cash lending entries,”

“consolidated counterparty exposure table”, “collateral posted entries” and “collateral received entries”). In

addition, the definition of “individual counterparty exposure table” would be amended to correct an error. The

definition currently mistakenly refers to Question 41 in addition to Question 42. Under the proposed

amendments, this error would be corrected to refer to Questions 42 and 43.

120

See proposed Question 42 of Form PF.

121

See proposed Form PF Glossary of Terms (definition of “borrowing entries”). In current Question 42 of Form PF,

the instructions for completing subsection (b) state that advisers must report “cash borrowing entries” in column

(d), whereas column (d) of the table in subsection (b) refers to “Borrowing”. The proposed change would

reconcile this difference by amending the instructions for completing subsection (b) of Question 42 to instruct

filers to report all borrowings (i.e., “borrowing entries” as defined in the proposed Form PF Glossary of Terms)

in column (d) of subsection (b).

122

Instructions for completing subsection (b) of Question 42 would be amended to direct advisers to report “the

dollar amount of each type of borrowing in rows (d)(1) through (d)(6).” See proposed Question 42 of Form PF.

123

A counterparty or creditor is significant if the reporting fund borrows from such counterparty an amount that is

equal to or greater than either five percent of its net asset value as of the data reporting date or $1 billion. See

proposed Question 42 of Form PF.

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conforming changes to the instructions for calculating the reporting fund’s net mark to market

counterparty credit exposure in Question 43 to revise references to “cash borrowing entries” to

“borrowing entries” and “cash lending entries” to “lending entries”. 124

Information on all borrowings and borrowing types are requested on a consolidated basis

under current Question 41, which would be removed under this proposal. Because this information

provides critical insight into large hedge funds’ interconnectedness to the broader financial system

and is often integrated with other data sets that enhance systemic risk assessment, we propose to

retain this information for qualifying hedge funds’ significant counterparty exposures. Proposed

Question 42 would provide reporting that corresponds to Question 41, but only for significant

counterparties of the qualifying hedge fund, without the margin increase reporting, and with the less

burdensome collateral breakdown required only for the top five counterparties of the qualifying

hedge fund. As a result, the proposed counterparty reporting would provide the information the

Commissions and FSOC should need to assess systemic risk or investor protection concerns relating

to counterparty exposures and borrowing but with substantially limited reporting burdens.

We do not expect any significant impacts from these proposed changes to simplify large hedge

fund reporting on the Commissions’ and the FSOC’s ability to monitor and identify systemic risk and

to protect investors because the Commissions and FSOC have alternative means by which

124

See proposed Question 43 of Form PF; proposed Form PF Glossary of Terms (definition of “lending entries”).

Under proposed Question 43, for counterparties to which the reporting fund had net borrowing exposure, the

reporting fund’s net mark to market counterparty credit exposure before collateral would equal the reporting

fund’s borrowing entries, and the reporting fund’s net mark to market counterparty credit exposure after

collateral would be the amount (if any) by which the collateral posted entries exceed such borrowing entries. See

supra footnote 121. For counterparties to which the reporting fund had net lending exposure, the reporting fund’s

net mark to market counterparty credit exposure before collateral would mean the lending entries. The reporting

fund’s net mark to market counterparty credit exposure after collateral would equal the amount (if any) by which

the reporting fund’s lending entries exceed the collateral received entries.

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information is collected on large hedge funds’ counterparty exposures. 125 For example, the

information Question 26 collects would facilitate the Commissions’ and FSOC’s understanding of

large hedge funds’ borrowing and financial relationships, counterparty exposures, collateral practices,

and the interconnectedness of large hedge funds within the broader financial services industry.

Importantly, the table in Question 26 would obtain information regarding both borrowing and lending

practices of large hedge funds and their collateral obligations on a monthly basis. This information

would provide the Commissions and FSOC with a bilateral picture of large hedge funds’ borrowing

and financing arrangements and sufficiently granular data to be able to monitor potential contagion

risks of any particular counterparty failure in rapidly changing markets and portfolios, to assess who

may be impacted by a reporting fund’s failure. Although we recognize that the classifications of

collateral within each borrowing, lending or transaction category as required in Question 26 may be

challenging in some instances for advisers to the extent counterparties do not track this information,

the burdens should be mitigated by the simplification of consolidated counterparty exposure reporting

by eliminating Question 41. To the extent Question 26 may nevertheless continue to pose challenges

for advisers, we request comment on ways to alleviate burdens while retaining the information

necessary to fulfill the Commissions’ and the FSOC’s systemic risk assessment and investor

protection objectives.

The Commissions and FSOC would also receive, through proposed Question 18, information on

large hedge funds’ total borrowings and creditor types broken out into the same categories that the

table in Question 41 had requested (i.e., U.S. depository institutions, U.S. creditors that are not U.S.

depository institutions, and non-U.S. creditors). 126 Moreover, as discussed above, the proposed

125

See infra section III.C.13 for a more detailed discussion of the benefits and costs of these proposed changes to

counterparty exposure reporting by large hedge fund advisers.

126

See proposed Question 18 of Form PF.

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changes to Question 42 would collect more detailed information such as types of borrowing from

significant counterparties and creditors of large hedge funds. In the absence of Question 41, the

aggregate reporting under Question 18 combined with reporting under Question 26 and proposed

Question 42 would still be appropriate and sufficient for purposes of the Commissions’ and FSOC’s

ability to monitor borrowing practices across the private fund industry and the level of

interconnectedness of large hedge funds to banks and the broader financial system. Moreover,

Question 42 and Question 43 would continue to obtain other detailed information about qualifying

hedge funds’ significant individual counterparties, 127 which should help the Commissions and FSOC

to localize accurately a large hedge fund’s risk exposure in the event of a particular counterparty

failure. 128

We also have alternative means through which we can sufficiently determine a reporting fund’s

sensitivity to margin increases from other questions on Form PF.129 These alternate means afford

FSOC the ability to collect and determine information relevant to monitoring systemic risk. For

example, the following questions concerning liquidity would help identify funds that are sensitive to

potential margin changes: Question 20, which requires advisers to report assets and liabilities

categorized by the fair valuation hierarchy, and Question 37, which requires advisers to report the

percentage by value of the reporting fund’s positions that may be liquidated within certain specified

periods. Together these questions help identify funds that are sensitive to potential margin changes

because they help identify the ability of a reporting fund to meet a margin call by selling liquid assets.

These alternative ways provide FSOC with sufficient information to monitor and assess systemic risk.

127

See proposed Question 42 and Question 43 of Form PF. See also infra III.C.13 for a more detailed discussion of

the benefits and costs of the proposed changes to counterparty exposure reporting by large hedge fund advisers.

128

See 2024 Form PF Adopting Release at section II.C.2.d.

129

See also infra section III.C.13 for a more detailed discussion of the benefits and costs of the proposed changes to

counterparty exposure reporting by large hedge fund advisers.

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The Commissions also seek comment on the burdens on advisers with respect to netting

counterparty exposures and cross-margining in response to Question 26, Question 27, Question 28,

Question 42 and Question 43. Question 26 directs advisers to net the reporting fund’s exposure to

each counterparty and among affiliated entities of a counterparty and associated collateral. Hedge

fund advisers that are not large hedge fund advisers are required to report certain significant

individual counterparty exposures including borrowing and collateral posted by the reporting fund in

response to Question 27 and Question 28, whereas large hedge fund advisers to qualifying hedge

funds must report on the fund’s significant individual counterparty exposures in response to Question

42 and Question 43. These questions also include detailed instructions on netting the exposure to each

counterparty, which were designed to help ensure data quality and comparability. 130

For example, in Question 26, netting must be used to reflect net cash borrowed from or lent to a

counterparty but must not be used to offset securities borrowed and lent against one another, when

reporting prime brokerage and repo/reverse repo transactions. 131 Since the adoption of the 2024

amendments, however, several members of the industry highlighted the significant burdens of

answering these questions and continued interpretive challenges with the netting instructions in the

form. In particular, reporting netted individual counterparty exposure may be operationally

challenging with respect to blended margin arrangements (e.g., cross-margining agreements).

Although Form PF provides instructions on how to net exposures and account for cross-margining

agreements, 132 these instructions have not alleviated interpretive challenges because advisers cannot

130

See 2024 Form PF Adopting Release at n.227.

131

See Question 26 of Form PF.

132

For example, Question 42(a)(iii) instructs as follows: “check this box if one or more prime brokerage agreements

provide for cross-margining of derivatives and secured financing transactions. If you have checked this box, and

collateral does not clearly pertain to secured financing vs. derivatives transactions, report exposures and

collateral as follows: . . . enter any additional collateral gathered by the prime broker under a cross margining

agreement on lines (iii)(B),(C), (D), and (E).” See also 2024 Form PF Adopting Release at n.402 and

accompanying text.

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necessarily align associated collateral with the borrowing, lending or transaction categories in the

counterparty exposure tables (e.g., breaking out netted counterparty exposures by different

transaction type and type of collateral as requested by Question 26 and the following questions on

individual counterparty exposures in Question 27, Question 28, Question 42 and Question 43). Filers

have also expressed difficulty with interpreting the netting instruction in Question 26 mentioned

above as it relates to reporting prime brokerage and repo/reverse repo transactions.

The concerns raised by members of the industry indicate that adjustments to the instructions

may be needed to better align them with how counterparty balances are reported to advisers in

practice and to better balance the filing burdens on advisers and the need for the Commissions and

FSOC to collect information necessary to monitor hedge funds’ borrowings and counterparty credit

exposures.

We request comment on the proposal to eliminate Question 41, as well as the proposed changes to

Question 42 and Question 43, and to the conforming amendments to certain terms in the Form PF

Glossary of Terms and to Question 42 and Question 43 to align them with Question 26; we also

request comment on reporting netted consolidated and individual counterparty exposures in response

to Question 26, Question 27, Question 28, Question 42 and Question 43:

65. Should the Commissions eliminate Question 41? Why or why not?

66. Would the proposed deletion of Question 41 impede our ability to appropriately collect

information about counterparty exposures in the large hedge fund industry necessary and

appropriate for the assessment of systemic risk? Why or why not?

67. Would removing Question 41 meaningfully alleviate burdens on large hedge fund advisers?

Why or why not? Should any adjustments be made to Question 26 to alleviate burdens on

large hedge fund advisers?

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68. Are any additio

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