WASHINGTON (CN) – Investment advisers managing at least $150 million in private fund assets will have to report fund information to the Financial Stability Oversight Board, according to new rules adopted by two financial agencies.
The two agencies, the Commodity Futures Trading Commission and the Securities Exchange Commission, said the reporting requirements will allow the oversight board to better detect “emerging trends in systemic risk” in the financial sector.
The new rules divide fund advisers into two categories based on the amount of assets and the type of funds under management. Small advisors are defined as those that manage less than $1 billion in combined assets under management attributable to liquidity funds and registered money market funds, or less than $1.5 billion attributable to hedge funds, or less than $2 billion in private equity funds.
Small private fund advisors will only have to file the jointly developed Form PF once a year within 120 days of the end of the fiscal year, providing basic information regarding size, leverage, investor types and concentration, liquidity, and fund performance.
Small fund advisers managing hedge funds also will have to report information about fund strategy, counterparty credit risk, and use of trading and clearing mechanisms.
Advisors to large hedge and liquidity funds will have to update their Form PF quarterly, while advisors to large private equity funds will only have to file once per fiscal year. Advisers with more than one type of fund and funds of different sizes have to report on all the funds they manage at the most frequent interval required by any one of the funds.
Large hedge fund advisers must report on an aggregated basis information regarding exposures by asset class, geographical concentration, and turnover by asset class, within 60 days of the end of each fiscal quarter. In addition, for each managed hedge fund having a net asset value of at least $500 million, these advisers are required to report certain information relating to that fund’s exposures, leverage, risk profile, and liquidity.
Advisers to large liquidity funds must provide information on the types of assets in each of their liquidity fund’s portfolios, the risk profile of the fund, and the extent to which the fund has a policy of complying with all or aspects of the Investment Company Act’s principal rule concerning registered money market funds. Their Form PF must be filed with 15 days of the end the fiscal quarter.
Large private equity fund managers, who only have to update their Form PF within 120 days of the end of the fiscal year must provide information on the leverage position of their funds’ portfolio companies, their use of bridge financing and their funds investments in financial institutions.
Most private fund advisers will have to begin filing Form PF following the end of their first fiscal year or quarter, as applicable, to end on or after Dec. 15, 2012.
However, advisers to funds with at least $5 billion in assets must begin filing the form following the end of their first fiscal year or quarter to end on or after June 15, 2012.