Summer Reporting Deadlines Approach For Hedge Funds

Hedge funds are facing an unprecedented burden of reporting requirements under newly effective regulations promulgated under the Dodd-Frank Act.



“The Dodd-Frank Act requires fund managers to report information, on an extremely granular level, to the government, which by law must collect and analyze such information,” said Richard Heller, a partner at law firm Thompson Hine.



The 49-page, five-section Form PF requires fund advisors to answer 79 questions and submit the data electronically to the Securities and Exchange Commission (SEC) and Commodity Futures Trading Commission.



Regulators plan to use data collected from respondents to aid in their mandates to govern the U.S. financial system and seek to determine whether specific funds, fund types or investment strategies threaten to destabilize it.



Large hedge and liquidity funds with assets under management of more than $5 billion are also subject to quarterly filing requirements beginning from June 30, with filing deadlines in July and August.



Meanwhile, all registered investment advisors with $150 million or more under management must file Form PF on an annual basis starting from the end of this year.



Accountancy firm KPMG has formed an alliance with Axiom Software Laboratories (AxiomSL), a provider of regulatory reporting and risk management solutions, to address new regulatory requirements facing investment advisers, including Form PF.



"We have been able to rapidly incorporate our actual field experience with Form PF into a tested software solution,” said Jonathan Cohn, a KPMG principal for IT strategy and performance. “This should help our clients reduce costly manual work and accelerate their efforts to submit controlled, high-quality Form PF data to regulators.”



AxiomSL said that it has successfully submitted test versions of Form PF to the federal electronic filing system for investment advisers, the Investment Adviser Registration Depository.



In addition to Form PF, hedge funds are subject to registration and compliance requirements under the Investment Advisers Act as a result of the Dodd-Frank Act, said Heller of Thompson Hine.



The scope of regulatory examinations will include whether investment advisers have adopted appropriate written compliance policies and procedures as required under the Advisers Act.



“Failing to demonstrate compliance with these and other requirements can have profound repercussions on an adviser,” said Heller.



Paladyne Systems, a provider of investment management technology and part of Broadridge Financial, has integrated regulatory reporting solutions provider Advise Technologies’ Form PF compliance system within the Paladyne suite of data collection and data management products, in order to enable fund managers and service providers to streamline their Form PF processes.



The result is an interactive web-based Form PF interface enabling clients to enrich data, approve calculated data and electronically file with the SEC. the company said.