SEC Releases Responses to Frequently Asked Questions Regarding Form PF
On June 8, 2012, the Securities and Exchange Commission (the “SEC”) released responses to certain frequently asked questions with respect to Form PF. The following responses were issued:
- A private fund should not be categorized as a commodity pool for reporting purposes if such fund’s commodity interest positions satisfy either of the de minimis tests in Regulation 4.13(a)(3)(ii) issued by the Commodity Futures Trading Commission.
- The categorization of a private fund as a “hedge fund” may change from reporting period to reporting period, which in turn may affect whether an investment adviser must report that it advises hedge funds or is a “large hedge fund adviser” with respect to a particular reporting period.
- The definitions of a “liquidity fund” and a “hedge fund” are not mutually exclusive and, as a result, certain private funds may meet the definition of, and be reported as, both.
- If a private fund’s operating documents allow for the potential use of leverage or short sales of assets in excess of thresholds set forth in Form PF, it should be treated as a hedge fund, regardless of actual or contemplated use of leverage or short sales.
- Parallel managed accounts advised by a related person that is not separately operated should be included when determining whether the parallel managed accounts are “dependent” parallel managed accounts for aggregation purposes in Instruction 5.
- A filer may treat as a “disregarded” private fund (and therefore complete only section 1b of Form PF with respect to) a private fund that (i) invests in private funds, regardless of whether the filer is the adviser of such private funds, and (ii) aside from such private fund investments, holds only cash and cash equivalents and instruments acquired for the purpose of hedging currency exposure.
- Disregarded private funds and disregarded investments should not be included for the purposes of determining whether a filer meets any of the large private fund adviser thresholds or the $5 billion compliance date thresholds, but should be included for the purpose of determining if the private fund assets managed by a filer exceed $150 million.
The SEC’s FAQ regarding Form PF can be found at: