Compliance

09:53 AM
Crystal Rodolphe, Advise Technologies, LLC
Crystal Rodolphe, Advise Technologies, LLC
Commentary
50%
50%

Form PF: Filing Can Be Tricky

Advise Technologies discusses the upcoming Form PF filing deadline on March 1st for large hedge funds.

Crystal Rodolphe
Crystal Rodolphe, Director, Best Practices Group, Advise Technologies, LLC

Investment advisers are currently knee deep in data, calculations and assumptions as they finalize their Form PF submissions before the fast approaching deadline of March 1 for quarterly filers (hedge funds with $1.5bn or more RAUM) and April 30 for annual filers (private equity firms, and hedge funds with between $150mm and $1.5bn RAUM).

These advisers will quickly learn that completing the Form is only part of the work to be done. Before they can actually file the Form with the SEC, advisers must complete a series of steps, some of which can take days to complete. Even then their filings might be rejected. As previous filers can attest, the process can be quite frustrating.

Advisers filing for the first time can learn from their predecessors (Form PF became effective last summer for private fund advisers with $5bn or more RAUM), many of whom had filings rejected for a variety of reasons.

Some filings were rejected due to discrepancies between information provided in Form PF and Form ADV, such as the identity of a new reporting fund. Many filings were rejected because data was not entered correctly, such as the adviser's entering of "N/A" instead of "NA". A number of advisers simply forgot to fund their CRD/IARD accounts before filing, and some advisers who planned to electronically file Form PF failed to complete the Web Services Entitlement Form.

[Form PF Will Be a Painful Burden for Hedge Funds ]

Some of these filers could not resolve the issues before the filing deadline and had to seek a filing extension by submitting a "request for temporary hardship exemption" (Section 5 of Form PF) to the SEC. The solution to reduce the possibility of rejection is to test file early to the PFRD "mirror test environment".

Advisers can follow 5 simple steps to ensure a smooth filing:

  • Make certain that Form ADV is updated. Advisers are required to periodically update Form ADV if information becomes inaccurate, and information provided in Form PF and Form ADV needs to be consistent. This step is particularly important for quarterly filers as their Form PF filings are due 60 days after the fiscal quarter-end, while the annual update to Form ADV is not due until 90 days after the fiscal year-end.
  • Confirm that the SAA (Super Account Administrator) has given PFRD "Use" privileges to the individual filing Form PF. User privileges are provided on the CRD website.
  • Fund the Web CRD/IARD account. Filing fees are $150 for each quarterly report and $150 for each annual report.
  • If e-filing with the SEC, complete the Web Services Entitlement Form, found here.
  • Submit a test filing. The SEC's Form PF XML filing schema is very particular and is updated from time to time. Test filing is essential in order to ensure that the filing is compliant with the requirements of the SEC schema. Firms should allow time to correct any errors in the submission in case they need to contact FINRA or seek assistance from a service provider. If an adviser does not receive an email from FINRA inviting them to test file, the adviser should contact FINRA's User Testing Team and request access to the "mirror test environment." Advisers will be provided with a testing username/password to submit a test filing.

To avoid missing the filing deadline, advisers should complete these steps and allow sufficient time to resolve any issues.

Crystal Rodolphe is the director of the Advise Technologies, LLC, best practices group. With more than 10 years in the industry, she consults fund admins, hedge funds and private equity firms on regulatory reporting forms.

Comment  | 
Print  | 
More Insights
More Commentary
Real-Time TCA for Decision Support & Transparency
Can transaction cost analysis (TCA) evolve from a post-trade analysis tool to support for real-time decision making? ITG thinks so.
Trust & Commitment In Today's Financial Services Industry
We know that consumers don't trust financial services firms, but The Caring Recruiter points out that financial services industry employees don't even trust each other.
Managing Mobile Risk in the Cloud
Firms should assess their apps and data being exposed to the cloud for the level of security, privacy robustness, and frequency of development updates they require.
What Will the Financial Back Office of Tomorrow Look Like?
Asset managers are increasingly looking to automate their manual back office workflows. Confluence calls it the "back office revolution."
Bankrolling Technical Debt: A Financierís Guide
Technical debt represents the effort required to fix source code or application problems that put the business at risk.
Register for Wall Street & Technology Newsletters
White Papers
Current Issue
Wall Street & Technology - July 2014
In addition to regular audits, the SEC will start to scrutinize the cyber-security preparedness of market participants.
Video
Stressed Out by Compliance, Reputational Damage & Fines?
Stressed Out by Compliance, Reputational Damage & Fines?
Financial services executives are living in a "regulatory pressure cooker." Here's how executives are preparing for the new compliance requirements.