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pdfOMB CONTROL NUMBER: 3235-0679
SUPPORTING STATEMENT
For the Paperwork Reduction Act Information Collection Submission for
Form PF and Rule 204(b)-1
A.
JUSTIFICATION
1.
Necessity for the Information Collection
Form PF [17 CFR 279.9] and rule 204(b)-1 [17 CFR 275.204(b)-1] under the Investment
Advisers Act of 1940 (“Advisers Act”) (together, the “rules”) require certain investment advisers
registered with the Securities and Exchange Commission (“SEC”) to report confidential
information about the private funds they advise. The rules implement provisions of Title IV of
the Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank Act”), which
amended the Advisers Act to require the SEC to, among other things, establish reporting
requirements for advisers to private funds. 1 The information collected on Form PF is designed to
facilitate the Financial Stability Oversight Council’s (“FSOC”) monitoring of systemic risk in the
private fund industry and assist FSOC in determining whether and how to deploy its regulatory
tools with respect to nonbank financial companies. 2 The SEC and the Commodity Futures
Trading Commission (“CFTC”) also may use information collected on Form PF in their
regulatory programs, including examinations, investigations, and investor protection efforts
relating to private fund advisers. 3 Form PF is a joint form between the SEC and the CFTC with
respect to sections 1 and 2; the SEC solely adopted the other sections of the form. 4
1
See 15 U.S.C. 80b-4(b) and 15 U.S.C. 80b-11(e).
2
See Form PF.
3
Id.
4
See 15 U.S.C. 80b-11(e).
1
The rules contain a “collection of information” within the meaning of the Paperwork
Reduction Act of 1995 (“PRA”). 5 The title for the collection of information is “Form PF and
Rule 204(b)-1” (OMB Control Number 3235-0679), and includes both Form PF and rule 204(b)1. An agency may not conduct or sponsor, and a person is not required to respond to, a
collection of information unless it displays a currently valid OMB control number. Compliance
with the information collection is mandatory.
The respondents are investment advisers who are (1) registered or required to be
registered under Advisers Act section 203, (2) advise one or more private funds, and (3)
managed private fund assets of at least $150 million at the end of their most recently completed
fiscal year (collectively, with their related persons). 6 Form PF divides respondents into groups
based on their size and types of private funds they manage, requiring some groups to file more
information more frequently than others. The types of respondents are (1) smaller private fund
advisers, that report annually (i.e., private fund advisers that do not qualify as large private fund
advisers), (2) large hedge fund advisers, that report more information quarterly (i.e., advisers
with at least $1.5 billion in hedge fund assets under management), (3) large liquidity fund
advisers, that report more information quarterly (i.e., advisers that manage liquidity funds and
have at least $1 billion in combined money market and liquidity fund assets under management),
and (4) large private equity advisers, that report more information annually (i.e., advisers with at
least $2 billion in private equity fund assets under management).
In addition to periodic filings, advisers must file limited information on Form PF in three
situations. First, any adviser that transitions from filing quarterly to annually because it has
5
44 U.S.C. 3501 through 3521.
6
See 17 CFR 275.204(b)-1.
2
ceased to qualify as a large hedge fund adviser or large liquidity fund adviser, must file a Form
PF indicating that it is no longer obligated to report on a quarterly basis. Second, any adviser
that is no longer subject to Form PF’s reporting requirements, must file a final report indicating
this. Third, an adviser may request a temporary hardship exemption if it encounters
unanticipated technical difficulties that prevent it from making a timely electronic filing. A
temporary hardship exemption extends the deadline for an electronic filing for seven business
days. To request a temporary hardship exemption, the adviser must file a request on Form PF.
On August 10, 2022, the SEC proposed to amend rule 204(b)-1 and the CFTC and SEC
proposed to amend the joint portions of Form PF. 7 The proposed amendments are designed to
enhance FSOC’s ability to monitor systemic risk as well as bolster the SEC’s regulatory
oversight of private fund advisers and investor protection efforts. As discussed more fully in the
proposing release, the proposed amendments would amend the form’s general instructions, as
well as section 1 of Form PF, which would apply to all Form PF filers. The proposed
amendments also would amend section 2 of Form PF, which would apply to large hedge fund
advisers that advise qualifying hedge funds (i.e., hedge funds with a net asset value of at least
$500 million). 8
2.
Purpose and Use of the Information Collection
The rules implement provisions of Title IV of the Dodd-Frank Act, which amended the
Advisers Act to require the SEC to, among other things, establish reporting requirements for
advisers to private funds. 9 The information collected on Form PF is designed to facilitate
7
See Form PF; Reporting Requirements for All Filers and Large Hedge Fund Advisers, Investment Advisers
Act Release No. 6083 (Aug. 10, 2022) (“Proposed Joint Amendments to Form PF”).
8
Id.
9
See 15 U.S.C. 80b-4(b) and 15 U.S.C. 80b-11(e).
3
FSOC’s monitoring of systemic risk in the private fund industry and assist FSOC in determining
whether and how to deploy its regulatory tools with respect to nonbank financial companies. 10
The SEC and the CFTC also may use information collected on Form PF in their regulatory
programs, including examinations, investigations, and investor protection efforts relating to
private fund advisers. 11 The proposed amendments are designed to enhance FSOC’s ability to
monitor systemic risk as well as bolster the SEC’s regulatory oversight of private fund advisers
and investor protection efforts. 12
3.
Consideration Given to Information Technology
Advisers must file Form PF electronically with the Form PF filing system. 13 The
Financial Industry Regulatory Authority (“FINRA”) maintains the Form PF filing system
through the Private Fund Reporting Depository (“PFRD”), a subsystem of the Investment
Adviser Registration Depository (“IARD”), through which registered advisers are already
separately obligated to file annual reports on Form ADV [17 CFR 279.1]. Form PF may be filed
either through a fillable form on the PFRD website or through a batch filing process utilizing the
eXtensible Markup Language (“XML”) tagged data format. Certain advisers may prefer to
report in XML format because it allows them to automate aspects of their reporting and,
therefore, minimize burdens and generate efficiencies for the adviser. Collecting information
electronically is designed to reduce the regulatory burden upon investment advisers by providing
10
See Form PF.
11
Id.
12
See Proposed Joint Amendments to Form PF, supra footnote 7.
13
See 17 CFR 275.204(b)-1(b).
4
a convenient portal for quickly transmitting reports and, for advisers that submit their reports in
XML format in particular, allowing them to automate aspects of their reporting.
4.
Duplication
The collection of information requirements of Form PF are not duplicated elsewhere.
5.
Effect on Small Entities
For purposes of the Advisers Act and the Regulatory Flexibility Act of 1980, an
investment adviser generally is a small entity if it (1) has assets under management having a total
value of less than $25 million; (2) did not have total assets of $5 million or more on the last day
of the most recent fiscal year; and (3) does not control, is not controlled by, and is not under
common control with another investment adviser that has assets under management of $25
million or more, or any person (other than a natural person) that had total assets of $5 million or
more on the last day of its most recent fiscal year. 14
By definition, no small entity on its own, would meet rules’ minimum reporting threshold
of $150 million in regulatory assets under management attributable to private funds. Based on
Form PF and Form ADV data as of December 2021, the SEC estimates that no small entity
advisers are required to file Form PF. The SEC does not have evidence to suggest that any small
entities are required to file Form PF but are not filing Form PF.
6.
Consequences of Not Conducting Collection
The rules implement provisions of Title IV of the Dodd-Frank Act, which amended the
Advisers Act to require the SEC to, among other things, establish reporting requirements for
advisers to private funds. 15 The information collected on Form PF is designed to facilitate
14
17 CFR 275.0-7.
15
See 15 U.S.C. 80b-4(b) and 15 U.S.C. 80b-11(e).
5
FSOC’s monitoring of systemic risk in the private fund industry and assist FSOC in determining
whether and how to deploy its regulatory tools with respect to nonbank financial companies. 16
The SEC and the CFTC also may use information collected on Form PF in their regulatory
programs, including examinations, investigations, and investor protection efforts relating to
private fund advisers. 17
The frequency of collection varies depending on the size of the adviser and the types of
private funds it manages, which balances the need for, and value of, current information against the
relative reporting burden for different types of advisers. If the information either is not collected
or is collected less frequently, FSOC’s ability to monitor systemic risk and deploy its regulatory
tools, as well as the SEC’s ability to protect investors, may be reduced.
7.
Inconsistencies with Guidelines in 5 CFR 1320.5(d)(2)
Not applicable.
8.
Consultation Outside the Agency
The SEC and the staff of the Division of Investment Management participate in an
ongoing dialogue with representatives of the investment management industry through public
conferences, meetings, and informal exchanges. These various forums provide the SEC and the
staff with a means of ascertaining and acting upon paperwork burdens confronting the industry.
The SEC requested comment on its proposal to amend the rules. 18 The Commission’s
solicitation of public comments included estimating and requesting public comments on the
16
See Form PF.
17
Id.
18
See Proposed Joint Amendments to Form PF, supra footnote 7.
6
burden estimates for all information collections under this OMB control number (i.e., both
changes associated with the rulemaking and other burden updates).
9.
Payment or Gift
Not applicable.
10.
Confidentiality
Responses to the information collection will be kept confidential to the extent permitted
by law. 19 Form PF elicits non-public information about private funds and their trading strategies,
the public disclosure of which could adversely affect the funds and their investors. The SEC
does not intend to make public Form PF information that is identifiable to any particular adviser
or private fund, although the SEC may use Form PF information in an enforcement action and
FSOC may use it to assess potential systemic risk. 20 SEC staff issues certain publications
designed to inform the public of the private funds industry, all of which use only aggregated or
masked information to avoid potentially disclosing any proprietary information. 21 The Advisers
Act precludes the SEC from being compelled to reveal Form PF information except (1) to
Congress, upon an agreement of confidentiality, (2) to comply with a request for information
from any other Federal department or agency or self-regulatory organization for purposes within
the scope of its jurisdiction, or (3) to comply with an order of a court of the United States in an
action brought by the United States or the SEC. 22 Any department, agency, or self-regulatory
organization that receives Form PF information must maintain its confidentiality consistent with
19
See 5 CFR 1320.5(d)(2)(vii) and (viii).
20
See 15 U.S.C. 80b-10(c) and 15 U.S.C. 80b-4(b).
21
See e.g., Private Funds Statistics, issued by staff of the SEC Division of Investment Management’s
Analytics Office, which we have used in this PRA as a data source, available at
https://www.sec.gov/divisions/investment/private-funds-statistics.shtml.
22
See 15 U.S.C. 80b-4(b)(8).
7
the level of confidentiality established for the SEC. 23 The Advisers Act requires the SEC to
make Form PF information available to FSOC. 24 For advisers that also are commodity pool
operators or commodity trading advisers, filing Form PF through the Form PF filing system is
filing with both the SEC and CFTC. 25 Therefore, the SEC makes Form PF information available
to FSOC and the CFTC, pursuant to Advisers Act section 204(b), making the information subject
to the confidentiality protections applicable to information required to be filed under that section.
Before sharing any Form PF information, the SEC requires that any such department, agency, or
self-regulatory organization represent to the SEC that it has in place controls designed to ensure
the use and handling of Form PF information in a manner consistent with the protections
required by the Advisers Act. The SEC has instituted procedures to protect the confidentiality of
Form PF information in a manner consistent with the protections required in the Advisers Act. 26
11.
Sensitive Questions
Form PF elicits non-public information about private funds and their trading strategies,
the public disclosure of which could adversely affect the funds and their investors. A System of
Records Notice that covers the collection of information has been published in the Federal
Register at 83 FR 6892 and can also be found at
http://www.sec.gov/about/privacy/secprivacyoffice.htm. Instructions for obtaining the Privacy
Impact Assessment for IARD can be found at
http://www.sec.gov/about/privacy/secprivacyoffice.htm.
23
See 15 U.S.C. 80b-4(b)(9).
24
See 15 U.S.C. 80b-4(b)(7).
25
See Reporting by Investment Advisers to Private Funds and Certain Commodity Pool Operators and
Commodity Trading Advisors on Form PF, Investment Advisers Act Release No. 3308 (Oct. 31, 2011), 76
FR 71128, at n.17 (Nov. 16, 2011).
26
See 5 CFR 1320.5(d)(2)(viii).
8
12.
Burden of Information Collection
We are revising our total burden estimates to reflect the proposed amendments, updated
data, and new methodology for certain estimates. 27 The tables below map out the Form PF
requirements as they apply to each group of respondents and detail our burden estimates.
27
For the previously approved estimates, see ICR Reference No. 202011-3235-019 (conclusion date Apr. 1,
2021), available at https://www.reginfo.gov/public/do/PRAViewICR?ref_nbr=202011-3235-019. See
Proposed Joint Amendments to Form PF, supra footnote 7.
9
a.
Proposed Form PF Requirements by Respondent
Table 1: Proposed Form PF Requirements by Respondent
Smaller
Large hedge Large liquidity
Form PF
private fund
fund advisers
fund advisers
advisers
Section 1a and section 1b
(basic information about
the adviser and the
Annually
Quarterly
Quarterly
private funds it advises)
Proposed revisions
Section 1c (additional
Annually, if
Quarterly, if
information concerning
they advise
Quarterly
they advise
hedge funds)
hedge funds
hedge funds
Proposed revisions
Section 2 (additional
information concerning
No
Quarterly
No
qualifying hedge funds)
Proposed revisions
Section 3 (additional
information concerning
No
No
Quarterly
liquidity funds)
No proposed revisions
Section 4 (additional
information concerning
No
No
No
private equity funds)
No proposed revisions
Section 5 (temporary
hardship request)
Optional, if
Optional, if
Optional, if
they qualify
they qualify
they qualify
The proposal would
revise filing instructions
Transition Filings
If they cease to If they cease to
(indicating the adviser is
qualify as a
qualify as a
no longer obligated to
Not applicable
large hedge
large liquidity
file on a quarterly basis)
fund adviser
fund adviser
No proposed revisions
Final Filings (indicating
the adviser is no longer
If they qualify If they qualify
If they qualify
subject to the rules)
No proposed revisions
10
Large private
equity advisers
Annually
Annually, if
they advise
hedge funds
No
No
Annually
Optional, if
they qualify
Not Applicable
If they qualify
b.
Annual Hour Burden Estimates
Below are tables with annual hour burden estimates for (1) initial filings, (2) ongoing
annual and quarterly filings, and (3) transition filings, final filings, and temporary hardship
requests.
11
Table 2: Annual Hour Burden Estimates for Initial Filings
Number of
Respondents
Hours Per
Hours
=
Response
Per
Respondent1
Aggregate
Amortized
Over 3
Response3
Number of
Years4
2
Responses
Smaller
Private
Fund
Advisers
Requested
309 responses6
Previously
Approved
Change
Large
Hedge
Fund
Advisers
Large
Liquidity
Fund
Advisers
Large
Private
Equity
Advisers
Aggregate
Hours
Amortized
Over 3 Years5
50 hours ÷ 3 =
17 hours
5,253 hours
272 responses
40 hours
23 hours
6,256 hours
37 responses
10 hours
(6) hour
(1,003) hours
345 hours ÷ 3 =
115 hours
1,725 hours
Requested
15 responses7
Previously
Approved
17 responses
325 hours
658 hours
11,186 hours
Change
(2) responses
20 hours
(543) hours
(9,461) hours
70 hours
70 hours
Requested
1 responses8
Previously
Approved
2 responses
200 hours
588 hours
1,176 hours
Change
(1) responses
10 hours
(518) hours
(1,106) hours
Requested
13 responses9
70 hours
910 hours
Previously
Approved
9 responses
200 hours
133 hours
1,197 hours
Change
4 responses
10 hours
(63) hours
(287) hours
210 hours ÷ 3 =
210 hours ÷ 3 =
12
Notes:
1. We expect that the hourly burden will be most significant for the initial report because the
adviser will need to familiarize itself with the new reporting form and may need to configure its
systems in order to efficiently gather the required information. In addition, we expect that some
large private fund advisers will find it efficient to automate some portion of the reporting
process, which will increase the burden of the initial filing but reduce the burden of subsequent
filings.
2. This concerns the initial filing; therefore, we estimate one response per respondent. The
proposed changes are due to using updated data to estimate the number of advisers.
3. Hours per response changes are due to the proposed amendments.
4. We propose to amortize the initial time burden over three years because we believe that most of
the burden would be incurred in the initial filing. We propose to use a different methodology to
calculate the estimate than the methodology staff used for the previously approved burdens. We
believe the previously approved burdens for initial filings inflated the estimates by using a
methodology that included subsequent filings for the next two years, which, for annual filers,
included 2 subsequent filings, and for quarterly filers, included 11 subsequent filings. For the
requested burden, we propose to calculate the initial filing, as amortized over the next three
years, by including only the hours related to the initial filing, not any subsequent filings. This
approach is designed to more accurately estimate the initial burden, as amortized over three
years. (For example, to estimate the previously approved burden for a large hedge fund adviser
making its initial filing, staff estimated that the adviser would have an amortized average annual
burden of 658 hours: ((1 initial filing x 325 hours) + (11 subsequent filings (because it files
quarterly) x 150 hours) = 1,975 hours. 1,975 hours / 3 years = approximately 658 previously
approved hours per response, amortized over three years).) Changes are due to using the revised
methodology and the proposed amendments.
5. (Number of responses) x (hours per response amortized over three years) = aggregate hours
amortized over three years. Changes are due to (1) using updated data to estimate the number of
advisers, (2) the new methodology to estimate the hours per response, amortized over three
years, and (3) the proposed amendments.
6. Private Funds Statistics show 2,394 smaller private fund advisers filed Form PF in the third
quarter of 2021. Based on filing data from the last five years, an average of 12.9 percent of
them did not file for the previous due date. (2,394 x 0.129 = 309 advisers.)
7. Private Funds Statistics show 592 large hedge fund advisers filed Form PF in the third quarter of
2021. Based on filing data from the last five years, an average of 2.6 percent of them did not
file for the previous due date. (592 x 0.026 = 15 advisers.)
8. Private Funds Statistics show 24 large liquidity fund advisers filed Form PF in the third quarter
of 2021. Based on filing data from the last five years, an average of 1.5 percent of them did not
file for the previous due date. (24 x 0.015 = 0.36 advisers, rounded up to 1 adviser.)
9. Private Funds Statistics show 369 large private equity advisers filed Form PF in the third quarter
of 2021. Based on filing data from the last five years, an average of 3.5 percent of them did not
file for the previous due date. (369 x 0.035 = 13 advisers.)
13
Table 3: Annual Hour Burden Estimates for Ongoing Annual and Quarterly Filings
Respondent1
Smaller
Private
Fund
Advisers
Large
Hedge
Fund
Advisers
Large
Liquidity
Fund
Advisers
Large
Private
Equity
Advisers
Number of
Respondents2
Number of
Responses3
Hours Per
Response4
Aggregate
Hours5
Requested
2,085 advisers6
x
1 response
x
20 hours =
41,700 hours
Previously
Approved
2,055 advisers
x
1 response
x
15 hours =
30,825 hours
Change
30 advisers
0
5 hours
10,875 hours
Requested
577 advisers7
x
4 responses x
160 hours =
369,280 hours
Previously
Approved
537 advisers
x
4 responses x
150 hours =
322,200 hours
Change
40 advisers
0
10 hours
47,080 hours
Requested
23 advisers8
x
4 responses x
75 hours =
6,900 hours
Previously
Approved
20 advisers
x
4 responses x
70 hours =
5,600 hours
5 hour
1,300 hours
Change
3 advisers
0
Requested
356 advisers9
x
1 response
x
105 hours =
37,380 hours
Previously
Approved
313 advisers
x
1 response
x
100 hours =
31,300 hours
5 hour
6,080 hours
Change
43 advisers
0
14
Notes:
1. We estimate that after an adviser files its initial report, it will incur significantly lower costs to
file ongoing annual and quarterly reports, because much of the work for the initial report is nonrecurring and likely created system configuration and reporting efficiencies.
2. Changes to the number of respondents are due to using updated data to estimate the number of
advisers.
3. Smaller private fund advisers and large private equity advisers file annually. Large hedge fund
advisers and large liquidity fund advisers file quarterly.
4. Hours per response changes are due to the proposed amendments.
5. Changes to the aggregated hours are due to (1) using updated data to estimate the number of
advisers and (2) the proposed amendments.
6. Private Funds Statistics show 2,394 smaller private fund advisers filed Form PF in the third
quarter of 2021. We estimated that 309 of them filed an initial filing, as discussed in Table 2:
Annual Hour Burden Estimates for Initial Filings. (2,394 total smaller advisers – 309 advisers
that made an initial filing = 2,085 advisers that make ongoing filings.)
7. Private Funds Statistics show 592 large hedge fund advisers filed Form PF in the third quarter of
2021. We estimated that 15 of them filed an initial filing, as discussed in Table 2: Annual Hour
Burden Estimates for Initial Filings. (592 total large hedge fund advisers – 15 advisers that
made an initial filing = 577 advisers that make ongoing filings.)
8. Private Funds Statistics show 24 large liquidity fund advisers filed Form PF in the third quarter
of 2021. We estimated that one of them filed an initial filing, as discussed in Table 2: Annual
Hour Burden Estimates for Initial Filings. (24 total large liquidity fund advisers – 1 adviser that
made an initial filing = 23 advisers that make ongoing filings.)
9. Private Funds Statistics show 369 large private equity advisers filed Form PF in the third quarter
of 2021. We estimated that 13 of them filed an initial filing, as discussed in Table 2: Annual
Hour Burden Estimates for Initial Filings. (369 total large private equity advisers – 13 advisers
that made an initial filing = 356 advisers that make ongoing filings.)
15
Table 4: Annual Hour Burden Estimates for Transition Filings, Final Filings, and
Temporary Hardship Requests
Aggregate
Number of
Responses2
Filing Type1
Transition Filing
from Quarterly to
Annual
Final Filings
Temporary
Hardship Requests
Aggregate
Hours3
Hours Per
Response
Requested
68 responses4
x
0.25 hours
=
17 hours
Previously
Approved
45 responses
x
0.25 hours
=
11.25 hours
Change
23 responses
Requested
233 responses5
x
0.25 hours
=
58.25 hours
Previously
Approved
54 responses
x
0.25 hours
=
13.5 hours
Change6
179 responses
0 hours
5.75 hours
0 hours
44.75 hours
Requested
3 responses7
x
1 hour
=
3 hours
Previously
Approved
4 responses
x
1 hour
=
4 hours
Change
(1) responses
0 hours
(1) hour
Notes:
1. Advisers make limited Form PF filings in three situations. First, any adviser that
transitions from filing quarterly to annually because it has ceased to qualify as a large
hedge fund adviser or large liquidity fund adviser, must file a Form PF indicating that it
is no longer obligated to report on a quarterly basis. Second, any adviser that is no
longer subject to Form PF’s reporting requirements, must file a final filing indicating
this. Third, an adviser may request a temporary hardship exemption if it encounters
unanticipated technical difficulties that prevent it from making a timely electronic
filing. A temporary hardship exemption extends the deadline for an electronic filing
for seven business days. To request a temporary hardship exemption, the adviser must
file a request on Form PF. The proposal would amend how advisers file temporary
hardship exemption requests; however, the proposed amendment would not result in
any changes to the hours per response.
2. Changes to the aggregate number of responses are due to using updated data. Changes
for final filings also are due to using a different methodology, as discussed below.
3. Changes to the aggregate hours are due to the changes in the aggregate number of
responses.
4. Private Funds Statistics show 616 advisers filed quarterly reports in the third quarter of
2021. Based on filing data from the last five years, an average of 11.1 percent of them
filed a transition filing. (616 x 0.111 = 68 responses.)
16
5. Private Funds Statistics show 3,379 advisers filed Form PF in the third quarter of 2021.
Based on filing data from the last five years, an average of 6.9 percent of them filed a
final filing. (3,379 x 0.069 = approximately 233 responses.)
6. Changes for final filings are due to using a different methodology. The previously
approved estimates used a percentage of quarterly filers to estimate how many advisers
filed a final report. We propose to use a percentage of all filers to estimate how many
advisers filed a final report, because all filers may file a final report, not just quarterly
filers. Therefore, this proposed methodology is designed to more accurately estimate
the number of responses for final filings.
7. Based on experience receiving temporary hardship requests, we estimate that 1 out of
1,000 advisers will file a temporary hardship exemption annually. Private Funds
Statistics show 3,379 advisers filed Form PF in the third quarter of 2021. (3,379 /
1,000 = approximately 3 responses.)
c.
Annual Monetized Time Burden Estimates
Below are tables with annual monetized time burden estimates for (1) initial filings, (2)
ongoing annual and quarterly filings, and (3) transition filings, final filings, and temporary
hardship requests. 28
28
The hourly wage rates are based on (1) SIFMA's Management & Professional Earnings in the Securities
Industry 2013, modified by SEC staff to account for an 1,800-hour work-year and inflation, and multiplied
by 5.35 to account for bonuses, firm size, employee benefits and overhead; and (2) SIFMA’s Office
Salaries in the Securities Industry 2013, modified by SEC staff to account for an 1,800-hour work-year and
inflation, and multiplied by 2.93 to account for bonuses, firm size, employee benefits and overhead.
17
Table 5: Annual Monetized Time Burden of Initial Filings
Respondent1
Requested
Smaller
Private
Fund
Advisers
Previously
Approved
Large
Hedge
Fund
Advisers
Requested
Large
Liquidity
Fund
Advisers
Requested
Large
Private
Equity
Advisers
Requested
Change
Previously
Approved
Change
Previously
Approved
Change
Previously
Approved
Change
Per
Response2
Per Response
Amortized
Over 3 years3
Aggregate
Number of
Responses4
$18,2505 ÷ 3 = $6,083 x 309 responses =
$13,460
x 272 responses =
$4,790
37 responses
$118,6806 ÷ 3 = $39,560 x
$103,123
x
$15,557
$63,460
x
$8,780
$63,460
x
$8,780
($1,781,473)
17 responses =
$1,753,091
($1,159,691)
1 responses =
$24,080
2 responses =
$126,920
($102,840)
13 responses =
$313,040
9 responses =
$571,140
4 responses
18
$3,661,120
$593,400
(1) responses
$72,2408 ÷ 3 = $24,080 x
$1,879,647
15 responses =
(2) responses
$72,2407 ÷ 3 = $24,080 x
Aggregate
Monetized
Time Burden
Amortized
Over 3 Years
($258,100)
Notes:
1. We expect that the monetized time burden will be most significant for the initial report, for
the same reasons discussed in Table 2: Annual Hour Burden Estimates for Initial Filings.
Accordingly, we anticipate that the initial report will require more attention from senior
personnel, including compliance managers and senior risk management specialists, than will
ongoing annual and quarterly filings. Changes are due to using (1) updated hours per
response estimates, as discussed in Table 2: Annual Hour Burden Estimates for Initial
Filings, (2) updated aggregate number of responses, as discussed in Table 2: Annual Hour
Burden Estimates for Initial Filings, and (3) updated wage estimates. Changes to the
aggregate monetized time burden, amortized over three years, also are due to amortizing the
monetized time burden, which the previously approved estimates did not calculate, as
discussed below.
2. For the hours per response in each calculation, see Table 2: Annual Hour Burden Estimates
for Initial Filings.
3. We propose to amortize the monetized time burden for initial filings over three years, as we
do with other initial burdens in this PRA, because we believe that most of the burden would
be incurred in the initial filing. The previously approved burden estimates did not calculate
this.
4. See Table 2: Annual Hour Burden Estimates for Initial Filings.
5. For smaller private fund advisers, we estimate that the initial report will most likely be
completed equally by a compliance manager at a cost of $339 per hour and a senior risk
management specialist at a cost of $391 per hour. (($339 per hour x 0.5) + ($391 per hour x
0.5)) x 50 hours per response = $18,250.
6. For large hedge fund advisers, we estimate that for the initial report, of a total estimated
burden of 345 hours, approximately 60 percent will most likely be performed by
compliance professionals and 40 percent will most likely be performed by programmers
working on system configuration and reporting automation (that is approximately 207 hours
for compliance professionals and approximately 138 hours for programmers). Of the work
performed by compliance professionals, we anticipate that it will be performed equally by a
compliance manager at a cost of $339 per hour and a senior risk management specialist at a
cost of $391 per hour. Of the work performed by programmers, we anticipate that it will be
performed equally by a senior programmer at a cost of $362 per hour and a programmer
analyst at a cost of $263 per hour. (($339 per hour x 0.5) + ($391 per hour x 0.5)) x 207
hours = $75,555. (($362 per hour x 0.5) + ($263 per hour x 0.5)) x 138 hours = $43,125.
$75,555 + $43,125 = $118,680.
7. For large liquidity fund advisers, we estimate that for the initial report, of a total estimated
burden of 210 hours, approximately 60 percent will most likely be performed by
compliance professionals and approximately 40 percent will most likely be performed by
programmers working on system configuration and reporting automation (that is
approximately 126 hours for compliance professionals and 84 hours for programmers). Of
the work performed by compliance professionals, we anticipate that it will be performed
equally by a compliance manager at a cost of $339 per hour and a senior risk management
specialist at a cost of $391 per hour. Of the work performed by programmers, we anticipate
that it will be performed equally by a senior programmer at a cost of $362 per hour and a
19
programmer analyst at a cost of $263 per hour. (($339 per hour x 0.5) + ($391 per hour x
0.5)) x 126 hours = $45,990. (($362 per hour x 0.5) + ($263 per hour x 0.5)) x 84 hours =
$26,250. $45,990 + $26,250 = $72,240.
8. For large private equity advisers, we expect that for the initial report, of a total estimated
burden of 210 hours, approximately 60 percent will most likely be performed by compliance
professionals and approximately 40 percent will most likely be performed by programmers
working on system configuration and reporting automation (that is approximately 126 hours
for compliance professionals and 84 hours for programmers). Of the work performed by
compliance professionals, we anticipate that it will be performed equally by a compliance
manager at a cost of $339 per hour and a senior risk management specialist at a cost of $391
per hour. Of the work performed by programmers, we anticipate that it will be performed
equally by a senior programmer at a cost of $362 per hour and a programmer analyst at a
cost of $263 per hour. (($339 per hour x 0.5) + ($391 per hour x 0.5)) x 126 hours =
$45,990. (($362 per hour x 0.5) + ($263 per hour x 0.5)) x 84 hours = $26,250. $45,990 +
$26,250 = $72,240.
20
Table 6: Annual Monetized Time Burden of Ongoing Annual and Quarterly Filings
Respondent1
Smaller
Private Fund
Advisers
Large Hedge
Fund Advisers
Per Response2
Large Private
Equity
Advisers
Aggregate
Monetized
Time Burden
Requested
$6,0403 x
2,085 responses4 =
$12,593,400
Previously
Approved
$4,173.75 x
2,055 responses =
$8,577,056
Change
$1,866.25
30 responses
$4,016,344
Requested
$48,3205 x
2,308 responses6 =
$111,522,560
Previously
Approved
$41,737.50 x
2,148 responses =
$89,652,150
Change
Large
Liquidity
Fund Advisers
Aggregate
Number of
Responses
$6,582.50
160 responses
$21,870,410
Requested
$22,6507 x
92 responses8 =
$2,083,800
Previously
Approved
$29,216.25 x
80 responses =
$2,337,300
Change9
($6,566.25)
12 responses
($253,500)
Requested
$31,71010 x
356 responses11 =
$11,288,760
Previously
Approved
$27,825 x
313 responses =
$8,709,225
Change
$3,885
43 responses
$2,579,505
Notes:
1. We expect that the monetized time burden will be less costly for ongoing annual and
quarterly reports than for initial reports, for the same reasons discussed in Table 3: Annual
Hour Burden Estimates for Ongoing Annual and Quarterly Filings. Accordingly, we
anticipate that senior personnel will bear less of the reporting burden than they would for
the initial report. Changes are due to using (1) updated wage estimates, (2) updated hours
per response estimates, as discussed in Table 3: Annual Hour Burden Estimates for
Ongoing Annual and Quarterly Filings, and (3) updated number of respondents, as
discussed in Table 3: Annual Hour Burden Estimates for Ongoing Annual and Quarterly
Filings. Changes to estimates concerning large liquidity fund advisers primarily appear to
be due to correcting a calculation error, as discussed below.
2. For all types of respondents, we estimate that both annual and quarterly reports would be
completed equally by (1) a compliance manager at a cost of $339 per hour, (2) a senior
compliance examiner at a cost of $260, (3) a senior risk management specialist at a cost of
$391 per hour, and (4) a risk management specialist at a cost of $218 an hour. ($339 x
0.25 = $84.75) + ($260 x 0.25 = $65) + ($391 x 0.25 = $97.75) + ($218 x 0.25 = $54.50)
= $302. To calculate the cost per response for each respondent, we used the hours per
21
response from Table 3: Annual Hour Burden Estimates for Ongoing Annual and Quarterly
Filings.
3. Cost per response for smaller private fund advisers: ($302 per hour x 20 hours per
response = $6,040 per response.)
4. (2,085 smaller private fund advisers x 1 response annually = 2,085 aggregate responses.)
5. Cost per response for large hedge fund advisers: ($302 per hour x 160 hours per response
= $48,320 per response.)
6. (577 large hedge fund advisers x 4 responses annually = 2,308 aggregate responses.)
7. Cost per response for large liquidity fund advisers: ($302 per hour x 75 hours per response
= $22,650 per response.
8. (23 large liquidity fund advisers x 4 responses annually = 92 aggregate responses.)
9. The previously approved estimates appear to have mistakenly used 105 hours instead of
the actual estimate for large liquidity fund advisers (which was 70 hours per response),
causing the monetized time burden to be inflated in error. Therefore, the extent of these
changes are primarily due to using the correct hours per response, which we now estimate
as 75 hours, as discussed in Table 3: Annual Hour Burden Estimates for Ongoing Annual
and Quarterly Filings.
10. Cost per response for large private equity advisers: ($302 per hour x 105 hours per
response = $31,710 per response.)
11. (356 private equity advisers x 1 response annually = 356 aggregate responses.)
22
Table 7: Annual Monetized Time Burden for Transition Filings, Final Filings, and
Temporary Hardship Requests
Per
Response
Filing Type1
Transition Filing
from Quarterly to
Annual
Final Filings
Requested
Previously
Approved
Change
Aggregate
Monetized
Time Burden
$19.253 x
68 responses =
$1,309
$17.75 x
45 responses =
$798.75
23 responses
$510.25
$1.50
Requested
$19.254 x
233 responses =
$4,485.25
Previously
Approved
$17.75 x
54 responses =
$958.50
Change
Temporary
Hardship Requests
Aggregate
Number of
Responses2
$1.50
179 responses
$3,526.75
Requested
$237.505 x
3 responses =
$712.50
Previously
Approved
$221.63 x
4 responses =
$886.52
Change
$15.87
(1) responses
($174.02)
Notes:
1. All changes are due to using updated data concerning wage rates and the number of
responses.
2. See Table 4: Annual Hour Burden Estimates for Transition Filings, Final Filings, and
Temporary Hardship Requests.
3. We estimate that each transition filing will take 0.25 hours and that a compliance clerk
would perform this work at a cost of $77 an hour. (0.25 hours x $77 = $19.25.)
4. We estimate that each final filing will take 0.25 hours and that a compliance clerk would
perform this work at a cost of $77 an hour. (0.25 hours x $77 = $19.25.)
5. We estimate that each temporary hardship request will take 1 hour. We estimate that a
compliance manager would perform five-eighths of the work at a cost of $339 and a
general clerk would perform three-eighths of the work at a cost of $68. (1 hour x ((5/8
of an hour x $339 = $212) + (3/8 of an hour x $68 = $25.50)) = $237.50 per response.
23
d.
Summary of Estimates and Change in Burden
Table 8: Aggregate Annual Estimates
Requested
Previously
Approved
3,379 respondents2
3,225 respondents
154 respondents3
5,483 responses4
5,056 responses
427 responses5
Time Burden
463,296 hours6
409,768 hours
53,528 hours7
Monetized Time Burden
(Dollars)
$140,305,1948
$122,152,100.25
$18,153,0949
$2,297,29010
$3,628,850
($1,331,560)11
Description1
Respondents
Responses
External Cost Burden
(Dollars)
Change
Notes:
1. Changes are due to (1) the proposed amendments, (2) using updated data, and (3) using
different methodologies to calculate certain estimates, as described in this PRA.
2. Private Funds Statistics show the following advisers filed Form PF in the third quarter
of 2021: 2,394 smaller private fund advisers + 592 large hedge fund advisers + 24 large
liquidity fund advisers + 369 large private equity advisers = 3,379 advisers.
3. Changes are due to using updated data.
4. For initial filings (Table 2): (309 smaller private fund adviser responses + 15 large
hedge fund adviser responses + 1 large liquidity fund adviser response + 13 large
private equity adviser responses = 338 responses.) For ongoing annual and quarterly
filings (Table 6): (2,085 smaller private fund adviser responses + 2,308 large hedge
fund adviser responses + 92 large liquidity fund adviser responses + 356 large private
equity adviser responses = 4,841 responses.) (338 responses for initial filings + 4,841
responses for ongoing annual and quarterly filings + 68 responses for transition filings
+ 233 responses for final filings + 3 responses for temporary hardship requests = 5,483
responses.)
5. Changes are due to using updated data concerning the number of filers.
6. For initial filings: (5,253 hours for smaller private fund advisers + 1,725 hours for large
hedge fund advisers + 70 hours for large liquidity fund advisers + 910 hours for large
private equity advisers = 7,958 hours). For ongoing annual and quarterly filings:
(41,700 hours for smaller private fund advisers + 369,280 hours for large hedge fund
advisers + 6,900 for hours large liquidity fund advisers + 37,380 hours for large private
equity advisers = 455,260 hours). (7,958 hours for initial filings + 455,260 for ongoing
24
annual and quarterly filings + 17 hours for transition filings + 58.25 hours for final
filings + 3 hours for temporary hardship requests = 463,296 hours.
7. Although we would expect the time burden to increase more, given the proposed
amendments, we estimate a smaller increase primarily because we propose to use a
different methodology to calculate initial burden hours, as discussed in Table 2: Annual
Hour Burden Estimates for Initial Filings, because the previously approved burdens for
initial filings appear to have inflated the estimates.
8. For initial filings: ($1,879,647 for smaller private fund advisers + $593,400 for large
hedge fund advisers + $24,080 for large liquidity fund advisers + $313,040 for large
private equity advisers = $2,810,167). For ongoing annual and quarterly filings:
($12,593,400 for smaller private fund advisers + $111,522,560 for large hedge fund
advisers + $2,083,800 for large liquidity fund advisers + $11,288,760 for large private
equity advisers = $137,488,520). ($2,810,167 for initial filings + $137,488,520 for
ongoing annual and quarterly filings + $1,309 for transition filings + $4,485.25 for final
filings + $712.50 for temporary hardship requests = $140,305,194.
9. Although we would expect the monetized time burden to increase more, given the
proposed amendments, we estimate a smaller increase primarily because we propose to
use a different methodology to calculate it. We believe the previously approved burden
inflated the estimates by using a methodology that inflated an element of the total: the
monetized time burden for initial filings. To calculate the monetized time burden for
initial filings, the previously approved estimates included subsequent filings. For the
requested total burden, we propose to calculate the initial filing element by including
only the hours related to the initial filing, not any subsequent filings. We also propose
to amortize the monetized time burden for an initial filing over three years, by dividing
the initial filing burden by three years, as discussed in Table 5: Annual Monetized Time
Burden of Initial Filings. The proposed methodology is designed to more accurately
reflect the estimates.
10. For the external cost burden: $1,388,997 for smaller private fund advisers + $605,205
for large hedge fund advisers + $31,067 for large liquidity fund advisers + $272,021 for
large private equity advisers = $2,297,290. See Table 9: Annual External Cost Burden
for Ongoing Annual and Quarterly Filings as well as Initial Filings.
11. Although we would expect the external cost burden to increase, given the proposed
amendments, we estimate it would decrease primarily because we propose to use a
different methodology to calculate it. We believe the previously approved burden
inflated the estimates by (1) multiplying the filing fees by three years and (2) not
amortizing the external costs for initial filings: ($742,950 aggregate annual filing fees x
3 years = $2,228,850 in filing fees) + $1,400,000 external costs of initial filings =
$3,628,850). We propose to not multiply the aggregate annual filing fees by three years
because we are estimating the external cost burden for one year, not three. We propose
to amortize the external cost for initial filings over three years, by dividing the external
cost of an initial filing by three years, as discussed in Table 9: Annual External Cost
Burden for Ongoing Annual and Quarterly Filings as well as Initial Filings. The
proposed methodology is designed to more accurately reflect the estimates.
25
13.
Cost to Respondents
We estimate an aggregate annual estimated external cost burden of $2,297,290, which
represents a decrease of $1,331,560 from the previously approved estimate of $3,628,850. See
Table 8: Aggregate Annual Estimates, above, which summarizes the total aggregate annual
estimated external cost burden. Also see the table below, which details the annual external cost
burden estimates for initial filings as well as ongoing annual and quarterly filings. There are no
filing fees for transition filings, final filings, or temporary hardship requests and we continue to
estimate there would be no external costs for those filings, as previously approved.
26
Table 9: Annual External Cost Burden for Ongoing Annual and Quarterly Filings as well as Initial Filings
Respondent1
Number of Filing
Total
Responses
Fee
Filing
Per
Per
Fees
2
Respondent Filing3
Requested
Smaller
Previously
Private
Approved
Fund
Advisers Change
Requested
Large
Previously
Hedge
Approved
Fund
Advisers Change
Requested
Large
Liquidity Previously
Fund
Approved
Advisers
Change
Requested
Large
Private Previously
Approved
Equity
Advisers Change
External
Cost of
Initial
Filing4
External
Cost of
Number
Initial Filing of Initial
Amortized Filings6
Over 3
Years5
Aggregate
External
Cost of
Total
Initial
Aggregate
Filing
External
Amortized
Cost8
Over 3
Years7
1 x $150 = $150 $10,000 ÷ 3 = $3,333 x 309 = $1,029,897
$1,388,9979
1 x $150 = $150
Not Applicable
$349,050
0
Not Applicable
$1,039,947
$0
$0
4 x $150 = $600 $50,000 ÷ 3 = $16,667 x
15 =
$250,005
$605,20510
4 x $150 = $600 $50,000
17 =
$850,000
$1,182,400
($599,995)
($577,195)
0
$0
$0
x
$0
(2)
4 x $150 = $600 $50,000 ÷ 3 = $16,667 x
1 =
$16,667
$31,06711
4 x $150 = $600 $50,000
2 =
$100,000
$113,200
(1)
($83,333)
($82,133)
13 =
$216,671
$272,02112
9 =
$450,000
$498,300
($233,329)
($226,279)
0
$0
$0
x
$0
1 x $150 = $150 $50,000 ÷ 3 = $16,667 x
1 x $150 = $150 $50,000
0
$0
$0
$0
27
x
4
Notes:
1. We estimate that advisers would incur the cost of filing fees for each filing. For initial filings, advisers may
incur costs to modify existing systems or deploy new systems to support Form PF reporting, acquire or use
hardware to perform computations, or otherwise process data that Form PF requires.
2. Smaller private fund advisers and large private equity advisers file annually. Large hedge fund advisers and
large liquidity fund advisers file quarterly.
3. The SEC established Form PF filing fees in a separate order. Since 2011, filing fees have been and continue
to be $150 per annual filing and $150 per quarterly filing. See Order Approving Filing Fees for Exempt
Reporting Advisers and Private Fund Advisers, Advisers Act Release No. 3305 (Oct. 24, 2011) [76 FR 67004
(Oct. 28, 2011)].
4. In the previous PRA submission for the rules, staff estimated that the external cost burden for initial filings
would range from $0 to $50,000 per adviser. This range reflected the fact that the cost to any adviser may
depend on how many funds or the types of funds it manages, the state of its existing systems, the complexity
of its business, the frequency of Form PF filings, the deadlines for completion, and the amount of information
the adviser must disclose on Form PF. Staff also estimated that smaller private fund advisers would be
unlikely to bear such costs because the information they must provide is limited and will, in many cases,
already be maintained in the ordinary course of business. Given the proposed amendments, we propose to
estimate that the external cost burden for smaller private fund advisers would range from $0 to $10,000, per
smaller private fund adviser. This range reflects the proposed amendments and is designed to reflect that the
cost to any smaller private fund adviser may depend on how many funds or the type of funds it manages, the
state of its existing systems, and the complexity of its business. We propose to use the upper range to
calculate the estimate for smaller private fund advisers: $10,000. Also, given the proposed amendments, we
continue to estimate that the external cost burden for initial filings for large hedge fund advisers, large
liquidity fund advisers, and large private equity advisers would continue to range from $0 to $50,000 for the
same reasons as the current estimates for those types of advisers. We propose to use the upper range to
calculate the estimates: $50,000.
5. We propose to amortize the external cost burden of initial filings over three years, as we do with other initial
burdens in this PRA, because we believe that most of the burden would be incurred in the initial filing. The
previously approved burden estimates did not calculate this.
6. See Table 2: Annual Hour Burden Estimates for Initial Filings.
7. Changes to the aggregate external cost of initial filings, amortized over three years are due to (1) the proposed
amendments, (2) using updated data, and (3) amortizing the external cost of initial filings over three years,
which the previously approved PRA did not calculate.
8. Changes to the total aggregate external cost are due to (1) the proposed amendments, (2) using updated data,
and (3) amortizing the external cost of initial filings over three years, which the previously approved PRA did
not calculate.
9. Private Funds Statistics show 2,394 smaller private fund advisers filed Form PF in the third quarter of 2021.
(2,394 smaller private fund advisers x $150 total filing fees) + $1,029,897 aggregate external cost of initial
filing amortized over three years = $1,388,997 total aggregate external cost.
10. Private Funds Statistics show 592 large hedge fund advisers filed Form PF in the third quarter of 2021. (592
large hedge fund advisers x $600 total filing fees) + $250,005 aggregate external cost of initial filing
amortized over three years = $605,205 total aggregate external cost.
28
11. Private Funds Statistics show 24 large liquidity fund advisers filed Form PF in the third quarter of 2021. (24
large liquidity fund advisers x $600 total filing fees) + $16,667 aggregate external cost of initial filing
amortized over three years = $31,067 total aggregate external cost.
12. Private Funds Statistics show 369 large private equity advisers filed Form PF in the third quarter of 2021.
(369 large private equity advisers x $150 total filing fees) + $216,671 aggregate external cost of initial filing
amortized over three years = $272,021 total aggregate external cost.
14.
Cost to the Federal Government
There are no costs to the government directly attributable to the rules.
15.
Change in Burden
The aggregate annual estimate of 3,379 respondents represents an increase of 154
respondents from the previously approved estimate of 3,225 respondents. The aggregate annual
estimate of 5,483 responses represents an increase of 427 responses from the previously
approved estimate of 5,056 responses. The aggregate annual estimated time burden of 463,296
hours represents an increase of 53,528 hours from the previously approved estimate of 409,768
hours. The aggregate annual estimated monetized time burden of $140,305,194 represents an
increase of $18,153,094 from the previously approved estimate of $122,152,100.25. The
aggregate annual estimated external cost burden of $2,297,290 represents a decrease of
$1,331,560 from the previously approved estimate of $3,628,850. The changes are due to
proposed amendments, updated data, and using a new methodology for certain estimates. These
changes in burden also reflect the Commission’s revision and update of burden estimates for all
information collections under this OMB control number (whether or not associated with
rulemaking changes), and the Commission requested public comment on all information
collection burden estimates for this OMB control number.
16.
Information Collection Planned for Statistical Purposes
Not applicable.
29
17.
Approval to Omit OMB Expiration Date
We request authorization to omit the expiration date on the electronic version of Form
PF, although the OMB control number will be displayed. Including the expiration date on the
electronic version of this form will result in increased costs, because the need to make changes to
the form may not follow the application’s scheduled version release dates.
18.
Exceptions to Certification Statement for Paperwork Reduction Act
Submission
Not applicable.
B.
COLLECTIONS OF INFORMATION EMPLOYING STATISTICAL METHODS
Not applicable.
30
| File Type | application/pdf |
| File Modified | 2022-09-09 |
| File Created | 2022-09-09 |