The US Securities & Exchange Commission (SEC) has proposed changes to the current Form PF reporting regime which would force hedge funds and private equity funds to report large investment losses or redemptions more frequently.

The US Securities & Exchange Commission (SEC) has proposed changes to the current Form PF reporting regime which would force hedge funds and private equity funds to report large investment losses or redemptions more frequently.

The proposed regulation would mean that large advisers would have to update their Form PF filings within a day of "certain extraordinary investment losses, significant margin and counterparty defaults events, material changes in prime broker relationships, changes in unencumbered cash, operations events and events associated with withdrawals and redemptions".

According to new SEC fact sheet, private equity fund advisers would also have to file current reports within one business day of the "occurrence of one or more reporting events pertaining to the execution of adviser-led secondary transactions, implementation of general partner or limited partner clawbacks, removal of a fund’s general partner, termination of a fund’s investment period, or termination of a fund". 

The SEC says the proposed changes are to allow it and the Fiancial Stability Oversight Council (FSOC) to receive more timely information about certain events that may signal distress at qualifying hedge funds and private equity funds or market instability.

Current rules require private funds to report such information only on an annual or quarterly basis, depending on the size of the fund.