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    Jun. 22, 2023

Final Form PF Amendments: Enhanced Reporting for Large Hedge Fund Advisers (Part One of Two)

In January 2022, the SEC proposed amendments (Proposal) to Form PF to enhance the information provided by private fund advisers by requiring more frequent reporting for large hedge fund advisers and private equity (PE) advisers upon the occurrence of certain events, as well as amending reporting requirements for large PE advisers and large liquidity fund advisers. On May 3, 2023, the SEC adopted, with some significant modifications, the amendments in the Proposal. This article, the first in a two-part series, discusses the final changes to Form PF relevant to large hedge fund advisers – noting the key differences from the Proposal – the SEC’s rationale for the amendments and the Commissioners’ views on the changes. The second article will discuss the compliance challenges posed by the current reports triggered by designated events and the short‑ and long‑term implications of the new reporting requirements. See our two-part series on the Proposal: “Prompt Reporting of Certain Stress Events and Enhanced Reporting by Large Liquidity Fund Advisers” (Mar. 3, 2022); and “Practical Impact on Fund Managers and Reasons for Industry Backlash” (Mar. 10, 2022).

Compliance Corner Q3‑2023: Regulatory Filings and Other Considerations That Hedge Fund Managers Should Note in the Coming Quarter

This twenty-fifth installment of the Hedge Fund Law Report’s quarterly compliance update, authored by ACA Group consultants Dan Campbell, Valerie Speare and Grazia Gatti, highlights upcoming filing deadlines and reporting requirements that fund managers should be aware of during the third quarter. This article also includes information on how firms can start to prepare for the proposed amendments to Regulation S-P, the current event reporting required for large hedge fund advisers by the recently approved Form PF amendments and a recent SEC risk alert concerning the cessation of LIBOR. For more from the ACA Group, see “Recent SEC ESG Rulemaking, Examination and Enforcement Activity” (Mar. 30, 2023).

With LIBOR Cessation Date Looming, SEC Risk Alert Details Preparedness Efforts

The June 30, 2023, planned cessation date for the London Interbank Offered Rate (LIBOR) is finally upon the industry. Advisers with legacy contracts that use LIBOR as a reference rate face business and compliance risks arising out of the transition to an alternative reference rate, including potential valuation issues and conflicts of interest. The SEC has been focusing on the impending transition for several years by making it an examination priority, conducting an exam initiative and issuing guidance to registrants. On May 11, 2023, the SEC Division of Examinations issued a risk alert (Risk Alert) that discusses the findings of that examination initiative and the remaining challenges registrants face. This article parses the Risk Alert and related SEC guidance, with commentary from Anne E. Beaumont, partner at Friedman Kaplan Seiler Adelman & Robbins LLP. See “One Year to Go: The State of Play in LIBOR Transition” (Jun. 23, 2022); and “Debtwire/SRS Acquiom Study: Hedge Funds Largely Prepared for LIBOR’s End; SOFR the Likely Replacement Rate” (Oct. 28, 2021).

Morgan Lewis Attorneys Discuss Private Fund Trends, Including ESG Investing

Private fund investors have been navigating a market roiled by rising interest rates, high volatility and geopolitical upheavals. Many are seeking liquidity at the same time that managers are having trouble exiting investments. A panel of Morgan Lewis partners at the firm’s Private Fund Investors Roundtable offered an overview of the private funds market; co-investments; and the rapidly evolving environmental, social and governance regulatory and investing landscape. This article presents the panel’s insights. For more from Morgan Lewis, see “Latest on Key Terms, Structuring Approaches and Trends in Secondary Transactions and Co‑Investments (Part One of Two)” (Mar. 10, 2022).

Navigating the Interplay of Breach Response and Breach Notification

The hours and days immediately following a cyber incident – especially a ransomware attack – are particularly challenging. Not only is a company struggling to assess damage and get back online, but it also might have only a very short time to notify multiple regulators. A recent Reed Smith program parsed the ever-evolving data breach and cyber incident reporting landscape and examined the challenges a company faces, and the potential solutions, in the immediate aftermath of an attack, using a hypothetical ransomware attack on a multinational company as a jumping-off point. The program featured counsel Catherine R. Castaldo and partners Howard Womersley Smith and Dr. Andreas Splittgerber. See our two-part series “Eleven Lessons From Cyber Hack That Forced an Australian Hedge Fund to Close”: Part One (Feb. 4, 2021); and Part Two (Feb. 11, 2021).

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