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To begin the year the SEC released their proposed changes to Form PF, which is a form that certain investment advisers registered with the SEC use to report confidential information about the private funds they advise. These proposed amendments to Form PF were released in January and were quickly followed by the SEC’s release of proposed private fund reforms on February 9th. These actions have made good on SEC Chair Gary Gensler’s outspoken intention to focus on private funds. Industry response to these proposals has been lukewarm, at best.

The approach by the SEC seems to be a look-through at the investor level. Chair Gensler cited that behind the retirement plans, endowments, and government pension plans that are typical investors in private funds, are the “teachers, firefighters, municipal workers, students, and professors.1” The intention is to look past the investor to the individual beneficial owners, which begins to treat these private fund investors as retail investors. Opposition to this view has expressed that private fund managers are not dealing with the beneficial owners of these plans and that it is a plan sponsor, trustee, or other sophisticated fiduciary that is ultimately responsible for the underlying investors.

Risk alerts from the Division of Examinations (formerly “OCIE”) in January of this year pointed directly to private fund deficiencies. These risk alerts are not isolated or new, in fact deficiencies concerning private funds persist year over year. So, it is clear that the SEC has been calling attention to the private fund space and private fund managers for some time. Further, private markets have gathered significant momentum and are now growing faster than the public markets. In response, and arguably over the course of recent years, in preparation, the SEC may be acting now to safeguard and regulate the space for the future.

Concerns about the burdens placed on private fund managers abound. CCO’s will undoubtedly see increased responsibility due to the nature of the role they serve for private funds. The impact of the proposal on preferential treatment and side letters alone could substantially increase the time and cost associated due to the additional reliance on legal, operational, and IT resources.

The proposal was published to the Federal Register in late March of this year, and the deadline for comments was April 25th, 2022. In a move undoubtedly stemming from the outpour of industry response, the SEC has since reopened this proposal for further comment in the Federal Register until June 13th, 2022.

PINE will continue to monitor these proposed private fund reforms and will provide detailed information regarding next steps, final rules, or other information that could be impactful. See our review of the proposal on our blog here. If you want to discuss what this means or how PINE can support your private fund business, reach us directly at

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