5 Key Takeaways from the SEC’s Form PF Amendments

1. Monthly Reporting for GAV and NAV

Currently, the SEC requires fund managers to report GAV and NAV calculations on a quarterly basis. The existing form includes questions related to positions exceeding 5% of NAV during non-reporting months, but it did not previously mandate the disclosure of the NAV or GAV itself. Under the new amendments, both GAV and NAV must now be reported monthly.

This shift may pose challenges for certain managers, particularly those utilizing GAAP-adjusted GAV balances. Moving to a monthly calculation schedule can increase the complexity and workload, especially for funds that net derivatives or cash balances. Ensuring accurate and timely GAV reporting may require additional adjustments and resources to meet these enhanced regulatory demands.

2. Expanded Borrowing Data Requirements

Another important change relates to borrowing, as detailed in Section 2b of the amendments. Funds must now split their borrowing data into US-based and non-US-based categories. In addition, there’s a greater emphasis on collateral and margin details associated with borrowing. This change will require funds to gather more detailed information and adjust their reporting processes accordingly.

While the amendments aim to standardize borrowing data, there is a recognition that different funds may have varying methodologies for calculating and reporting this information.

3. New Investor Tagging Categories For Form PF

The Form PF amendments also introduce six new investor tagging categories, providing more detailed classifications for fund managers to report. This change allows for greater transparency in the type and composition of investors participating in funds.

Funds will need to work closely with their investor relations teams to ensure these new categories are properly implemented and reported in compliance with the new rules.

4. Contributions and Withdrawals Now a Required Data Point

In addition to the enhanced data reporting frequency, the Form PF amendments introduce new reporting requirements related to contributions and withdrawals. Fund managers will need to provide detailed dollar figures for these during each reporting period. This mirrors the type of reporting required under AIFMD regulations, which some managers may already be familiar with.

The collection of contribution and withdrawal data will become a new routine task, which may require adjustments to internal tracking systems or workflows.

5. Variability in GAV Calculation Methods

The latest Form PF amendments also highlight the variability in GAV calculation methods. Different funds may approach this differently, whether through financial reporting adjustments, trial balances, or rolling up broker cash and derivatives. This variability underscores the need for each fund to assess whether its current GAV methodology is aligned with the new monthly reporting requirements. While the SEC provides flexibility, this will require fund managers to evaluate and potentially modify their existing calculation methods to meet the new standards.

Adapting to Form PF Amendments: Next Steps

The SEC’s Form PF amendments bring key changes, from monthly GAV/NAV reporting to expanded borrowing data and new investor classifications. These updates demand that fund managers reassess and refine their reporting processes and systems so that they’re equipped to start reporting in the new Form, by March 12, 2025.

At AQMetrics, we keep our finger on the pulse, constantly adapting to evolving global regulatory standards and offering our clients the tools and guidance needed to streamline the transition. Leveraging our in-house subject matter expertise, we are actively integrating regulatory amendments into our reporting solutions, collaborating with our clients to ensure they are ready to meet the new requirements.