With the deadline for the first SEC Form PF filings about three months away, GlobeOp has released a number of findings after having performed test filings on behalf of clients.
Form PF requires private funds, such as hedge funds and private equity funds, to report various details to U.S. regulators with the goal of monitoring systemic risk those funds potentially pose to the U.S. economy. It has created a new business for administrators, many of whom have launched products and services to help their clients with the reporting requirements.
GlobeOp says Regulatory AUM (RAUM) calculations, which are a measure of the gross assets on a firms balance sheet, created confusion for some fund management companies, who were under the false impression that filing was driven by the funds net asset value (NAV). Because RAUM includes derivatives, firms with even modest leverage could potentially have significantly higher RAUM than their normal NAV or AuM measures, GlobeOp says. That impacts a funds category for filing deadlines and frequency and content of reporting, as the requirements vary depending on the size of a fund.
Second, GlobeOp found that the XML filing format requirements released earlier this month by FINRA, the U.S. independent securities regulator, will impact Form PF reporting. GlobeOp says it is the most practical option for large funds to submit Form PF.
Third, GlobeOp says there was room for interpretation around the way the form is filled out, as many questions have no single answer. Finally, early preparation will be key for collecting the wide range of data required to be submitted via Form PF, the administrator adds.
Our dedicated Form PF team led by Tony Glickman, global head of Client Solutions, has produced test reports across a range of fund strategies and managed accounts, says Vernon Barback, president and COO of GlobeOp. Its been an instructive process for us all, including putting our automated data systems and the SECs electronic format through their paces. Weve also been able to work with the regulators to discuss client questions and further refine the sustainable processes needed as Form PF becomes an ongoing fact of life for hedge funds.
(CG)