SEC Uses Form PF Data for Examinations and Enforcement
In its annual Form PF report to Congress, the SEC said that it uses Form PF data in both examinations and enforcement. Although Form PF was primarily designed for FSOC to “monitor systemic risk in U.S. financial markets,” the SEC examination staff reviews Form PF before commencing exams to check for inconsistencies with other documents such as Form ADV, sales materials, and offering documents. The staff also closely examines Form PF information against other documents with respect to holdings, leverage, liquidity, and derivatives. The SEC reports that the Enforcement staff “utilizes Form PF data in investigations of private fund advisers.” The Division of Risk Analysis uses Form PF data “to identify advisers engaging in activities implicating particular areas of examination focus” such as exposures, valuation, and high-frequency trading and to identify “red flags” that may trigger examinations. Form PF was filed by 2,661 private fund advisers, representing 21,542 funds and over $8 trillion in assets.
OUR TAKE: Firms should take care when completing Form PF that they do not say anything inconsistent with other documents delivered to the SEC or investors.