FEATURE
2 – 8 MAY 2013
Form PF annual filers: 10 items to check before you file
By Jeanette Turner, managing director and general counsel, Advise Technologies, LLC
nvestment advisers subject to annual Form PF reporting are filing Form PF for the first time on April 30, 2013 (assuming fiscal year-end of December 31). Annual filers include Registered Investment Advisers that have at least $150m in private fund AUM as of the last day of their most recently completed fiscal year, but are not large hedge fund advisers (having $1.5bn or more in hedge fund AUM) or large liquidity fund advisers (having $1bn or more in combined money market and liquidity fund AUM), each of which file quarterly. All annual Form PF filers are required to report information regarding size, leverage, investor types and concentration, liquidity, and fund performance. Additional information must be reported by annual filers managing hedge funds and also large private equity advisers (having $2bn or more in private equity AUM). Before advisers file the form, however, there are some final checks that should take place to ensure everything is in order. Here is a checklist each adviser should complete before filing. 1. Check the glossary definition of “hedge fund” to ensure your private equity fund doesn’t have to file as a hedge fund. Many filers need to file Section 1(c) for their PE funds, due to how “hedge fund” is defined. But take heart: if you find that you should have been filing quarterly as a large hedge fund adviser, you don’t need to file retroactively; the SEC’s guidance is to start with the next quarterly filing. 2. Confirm that your Form ADV is consistent with your Form PF filing and properly identifies the funds for which you are filing. If the forms are inconsistent, you will receive a submission error when you try to file Form PF. If you closed a fund during the reporting period, you still must file Form PF for the fund. However, you cannot file Form PF for a fund that is not listed on your ADV, so you should first file for the funds that
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are on your ADV and then file an amendment to report on any funds that are no longer listed (when you file an amendment, you are allowed to manually list funds that are not on your ADV). 3. For any master-feeder fund structures you aggregated in ADV, make sure you aggregate in Form PF. 4. Only identify related persons in Question 1(b) if you are filing a Form PF report on behalf of an adviser. Per Instruction 4, do not list exempt subadvisers for whom you are filing. 5. For any equity investments in other private funds, including any of your funds of funds, check you properly disregard the investments in the other private funds. Per Instruction 7 and the FAQs, do not include these assets in Questions 3, 8 or 9. 6. Re-read Instruction 15. Make sure you are appropriately determining “value” based on the definitions provided. If you are reporting for a hedge fund, pay particular attention to the bullet point addressing Questions 20, 21, and 25. Also, confirm you are correctly entering information (percentages rounded to the nearest one percent; monetary values rounded to the nearest thousand; and numerical values rounded to the nearest whole number). 7. For Questions 15 and 16, “beneficial owner” is not defined in the glossary. However, it means any person who would be counted as a beneficial owner under section 3(c)(1) of the Investment Company Act or who would be included in determining whether the owners of the fund are qualified purchasers under section 3(c)(7) of that Act. 8. Confirm that the information you are providing in Form PF is consistent with information that you report internally and to current and prospective investors. Regulators pay attention to this. 9. If filing via xml upload, submit a test filing. This allows you to catch any validation errors before the actual filing. You can sign up for free test filing at www.surveymonkey.com/s/5VCBZG7. 10. There is a $150 filing fee, so fund your Web CRD/IARD account. The last hour is not the time to realize you forgot to fund your account. With these final checks, an adviser should be ready to file Form PF.
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