The First Wave of Form PF Requirements Are on the Horizon; Are You Ready?

Sometimes as a journalist you have to dig deep to find story ideas; sometimes the stories walk right up to you and slap you in the face. This is a story of the latter.

Over the last few weeks, several vendors and fund administrators have released new solutions geared toward helping fund advisors handle new Form PF requirements. When I see a string of similar releases and emails pitching the same subject, I take notice.

Sure enough, most private fund (PF) advisors with assets under management of $5 billion or more will have to begin handing over these reports to the US Securities and Exchange Commission (SEC) on June 15. (All other firms that are required to report have until Dec. 15.)

What this means is that many firms are likely just now beginning to test their data aggregation and auditing capabilities.

This week I spoke with NorthPoint senior manager Nigel Cheetham about his firm's Form PF solution, which was unveiled on Wednesday. He says his larger clients will begin doing mock-filings on the platform over the coming months.

Cheetham says there is a lot of interpretation behind the instructions that were published by the SEC, and then approved by the US Commodity Futures Trading Commission (CFTC). He says firms can choose to report the funds separately or can aggregate the funds together. There is a question as to which funds should be included or excluded. Firms have to decide how to classify their assets and they have to figure out what risk numbers the regulators are looking for.

"The advisory side is a big challenge that I think many firms are unprepared for," Cheetham says. "That's why we're seeing quite a few clients retain legal advice or professional advisory services. From that is the technology piece of bringing all this information together. There's a technology gap where all of this information needs to be collected, classified, aggregated, and it's not as simple as entering in aggregated values into a portal because those numbers that you report are going to have to be justified. You have to have the systems and data to be able to back up those numbers and they have to be stored in perpetuity in some repository internal to the fund."

As firms begin to test their Form PF solutions, I'd be interested to hear about difficulties or glitches. If you're a private advisor, we can chat off the record. If you're a vendor and you have a client that wants to discuss how they are using your product, I'd love to hear from you. If you're a lawyer, what are clients asking you for?

Basically, I'm looking for you to slap me in the face with some information. As always, send me an email at anthony.malakian@incisivemedia.com or call me at +1 646-490-3973.