Download:
pdf |
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., currently
defined as advisers with at least $2 billion in private equity fund assets under management, but
as discussed below, the SEC proposes to lower this threshold to $1.5 billion).
5
44 U.S.C. 3501 through 3521.
6
See 17 CFR 275.204(b)-1.
2
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
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 January 24, 2022, the SEC proposed to amend rule 204(b)-1 and the SEC-only
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 do the following: 8
•
Require large hedge fund advisers to file current reports upon certain reporting
events;
•
Require advisers to private equity funds to file current reports upon certain
reporting events;
•
Reduce the threshold to qualify as a large private equity adviser;
7
See Amendments to Form PF to Require Current Reporting and Amend Reporting Requirements for Large
Private Equity Advisers and Large Liquidity Fund Advisers, Investment Advisers Act Release No. 5950
(Jan. 26, 2022), 87 FR 9106 (Feb. 17, 2022) (“Proposed SEC Amendments to Form PF”).
8
Id.
3
•
Amend how large private equity advisers report information about the private
equity funds they advise; and
•
Amend how large liquidity fund advisers report information about the liquidity
funds they advise.
•
Under the proposal, temporary hardship exemptions would be available for
current reporting.
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
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
9
See 15 U.S.C. 80b-4(b) and 15 U.S.C. 80b-11(e).
10
See Form PF.
11
Id.
12
See Proposed SEC Amendments to Form PF, supra footnote 7.
4
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
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 the 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
13
See 17 CFR 275.204(b)-1(b).
5
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 September 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
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
14
17 CFR 275.0-7.
15
See 15 U.S.C. 80b-4(b) and 15 U.S.C. 80b-11(e).
16
See Form PF.
17
Id.
6
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)
Under 5 CFR 1320.5(d)(2)(i), OMB will not approve a collection of information
requiring respondents to report information to the agency more often than quarterly, unless the
agency is able to demonstrate that it is necessary to satisfy statutory requirements or other
substantial need. The proposed amendments would require advisers submit current reports upon
certain reporting events, which could occur more or less than quarterly. The proposed current
reporting requirements are necessary to satisfy statutory requirements or other substantial need to
assist the FSOC in its monitoring obligations under the Dodd-Frank Act and assist the SEC in its
investor protection efforts under the Advisers Act, by providing the SEC and FSOC with more
timely data to identify and respond to private funds that are facing stress that could result in
investor harm or systemic risk.
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
18
See Proposed SEC Amendments to Form PF, supra footnote 7.
7
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 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 the level of
confidentiality established for the SEC. 23 The Advisers Act requires the SEC to make Form PF
19
See 5 CFR 1320.5(d)(2)(vii) and (viii).
20
See 15 U.S.C. 80b-10(c).
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).
23
See 15 U.S.C. 80b-4(b)(9).
8
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.
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).
9
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.
10
a.
Proposed Form PF Requirements by Respondent
Table 1: Proposed Form PF Requirements by Respondent
Form PF
Section 1a and section 1b (basic
information about the adviser and
the private funds it advises)
No proposed revisions
Section 1c (additional information
concerning hedge funds)
No proposed revisions
Section 2 (additional information
concerning qualifying hedge funds)
No proposed revisions
Section 3 (additional information
concerning liquidity funds)
Proposed revisions
Section 4 (additional information
concerning private equity funds)
Proposed revisions
Section 5 (current reporting
concerning qualifying hedge funds)
The proposal would add section 5
Section 6 (current reporting for
private equity advisers)
The proposal would add section 6
Section 7 (temporary hardship
request)
The proposal would make this
available for current reporting
Transition Filings (indicating the
adviser is no longer obligated to file
on a quarterly basis)
No proposed revisions
Final Filings (indicating the adviser
is no longer subject to the rules)
No proposed revisions
Smaller
private fund
advisers
Large hedge
fund advisers
Large
liquidity
fund advisers
Large private
equity
advisers
Annually
Quarterly
Quarterly
Annually
Annually, if
they advise
hedge funds
Quarterly
Quarterly, if
they advise
hedge funds
Annually, if
they advise
hedge funds
No
Quarterly
No
No
No
No
Quarterly
No
No
No
No
Annually
No
Upon a
reporting
event
No
No
No
No
Upon a
reporting event
Optional, if
they qualify
Optional, if
they qualify
Optional, if
they qualify
Optional, if
they qualify
Not applicable
If they cease
to qualify as a
large hedge
fund adviser
If they cease
to qualify as a
large liquidity
fund adviser
Not Applicable
If they qualify
If they qualify
If they qualify
If they qualify
Upon a
reporting
event, if they
advise private
equity funds
11
b.
Annual Hour Burden Estimates
Below are tables with annual hour burden estimates for (1) initial filings, (2) ongoing
annual and quarterly filings, (3) current reporting, and (4) transition filings, final filings, and
temporary hardship requests.
12
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
Large
Hedge
Fund
Advisers
Large
Liquidity
Fund
Advisers
Large
Private
Equity
Advisers
Requested
313 responses6
Previously
Approved
Change
Aggregate
Hours
Amortized
Over 3 Years5
40 hours ÷ 3 =
13 hours
4,069 hours
272 responses
40 hours
23 hours
6,256 hours
41 responses
0 hours
(10) hour
(2,187) hours
325 hours ÷ 3 =
108 hours
1,512 hours
Requested
14 responses7
Previously
Approved
17 responses
325 hours
658 hours
11,186 hours
Change
(3) responses
0 hours
(550) hours
(9,674) hours
67 hours
67 hours
Requested
1 responses8
Previously
Approved
2 responses
200 hours
588 hours
1,176 hours
Change
(1) responses
2 hours
(521) hours
(1,109) hours
Requested
42 responses9
83 hours
3,486 hours
Previously
Approved
9 responses
200 hours
133 hours
1,197 hours
33 responses
50 hours
(50) hours
2,289 hours
Change
202 hours ÷ 3 =
250 hours ÷ 3 =
13
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. The
proposed changes concerning large private equity advisers also are due to the proposed
amendment to reduce the filing threshold.
3. Hours per response changes for large liquidity fund advisers and large private equity advisers
are due to proposed amendments to sections 3 and 4, respectively.
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 changes for the large liquidity fund advisers and large hedge fund advisers
also are due to proposed amendments to section 3 and 4, respectively.
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 and (2) the new methodology to estimate the hours per response, amortized over three
years. For large liquidity fund advisers, changes also are due to proposed amendments to
section 3. For large private equity advisers, changes also are due to the proposed amendments
to lower the threshold and amend section 4.
6. Private Funds Statistics show 2,427 smaller private fund advisers filed Form PF in the fourth
quarter of 2020. 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. (2,427 x 0.129 = 313 advisers.)
7. Private Funds Statistics show 545 large hedge fund advisers filed Form PF in the fourth quarter
of 2020. 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. (545 x 0.026 = 14.17 advisers, rounded to 14 advisers.)
8. Private Funds Statistics show 23 large liquidity fund advisers filed Form PF in the fourth quarter
of 2020. 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. (23 x 0.015 = 0.345 advisers, rounded up to 1 adviser.)
14
9. Private Funds Statistics show 364 large private equity advisers filed Form PF in the fourth
quarter of 2020. 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. (364 x 0.035 = 12.74 advisers, rounded to 13 advisers.)
As discussed in section II.B, we estimate that reducing the filing threshold for large private
equity advisers would capture eight percent more of the U.S. private equity industry based on
committed capital (from 67 percent to 75 percent of the U.S. private equity industry).
Therefore, we propose to estimate the number of large private equity advisers would increase by
eight percent, as a result of the proposed threshold. ((364 large private equity advisers x 0.08 =
29.12, rounded to 29 additional large private equity advisers filing for the first time as a result of
the proposed threshold) + (13 advisers) = 42 advisers.).)
15
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
2,114 advisers6
x
1 response
x
15 hours =
31,710 hours
Previously
Approved
2,055 advisers
x
1 response
x
15 hours =
30,825 hours
Change
Requested
Previously
Approved
59 advisers
0
0 hours
885 hours
531 advisers7
x
4 responses x
150 hours =
318,600 hours
537 advisers
x
4 responses x
150 hours =
322,200 hours
0 hours
(3,600) hours
Change
(6) advisers
Requested
22 advisers8
x
4 responses x
71 hours =
6,248 hours
Previously
Approved
20 advisers
x
4 responses x
70 hours =
5,600 hours
Change
0
2 advisers
0
1 hour
648 hours
Requested
351 advisers9
x
1 response
x
125 hours =
43,875 hours
Previously
Approved
313 advisers
x
1 response
x
100 hours =
31,300 hours
Change
38 advisers
0
16
25 hours
12,575 hours
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. For large private equity advisers, changes also are due to the proposed amendment to
lower the threshold.
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 for the large liquidity fund advisers and large private equity
advisers are due to the proposed amendments to sections 3 and 4, respectively.
5. Changes to the aggregate hours are due to using updated data to estimate the number of
advisers. For large liquidity fund advisers and large private equity advisers, changes also are
due to the proposed amendments to sections 3 and 4, respectively.
6. Private Funds Statistics show 2,427 smaller private fund advisers filed Form PF in the fourth
quarter of 2020. We estimated that 313 of them filed an initial filing, as discussed in Table 2:
Annual Hour Burden Estimates for Initial Filings. (2,427 total smaller advisers – 313 advisers
who made an initial filing = 2,114 advisers who make ongoing filings.)
7. Private Funds Statistics show 545 large hedge fund advisers filed Form PF in the fourth quarter
of 2020. We estimated that 14 of them filed an initial filing, as discussed in Table 2: Annual
Hour Burden Estimates for Initial Filings. (545 total large hedge fund advisers – 14 advisers
who made an initial filing = 531 advisers who make ongoing filings.)
8. Private Funds Statistics show 23 large liquidity fund advisers filed Form PF in the fourth quarter
of 2020. We estimated that one of them filed an initial filing, as discussed in Table 2: Annual
Hour Burden Estimates for Initial Filings. (23 total large liquidity fund advisers – 1 adviser who
made an initial filing = 22 advisers who make ongoing filings.)
9. Private Funds Statistics show 364 large private equity advisers filed Form PF in the fourth
quarter of 2020. 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. (364 x 0.035 = 12.74 advisers, rounded to 13 advisers.)
(364 total large private equity advisers – 13 advisers who made an initial filing = 351 advisers
who make ongoing filings.) Lowering the filing threshold for large private equity advisers
would result in additional advisers filing for the first time, as discussed in Table 2: Annual Hour
Burden Estimates for Initial Filings.
17
Table 4: Annual Hour Burden Estimates for Current Reporting
Aggregate
Number of
Responses
Respondent1
Smaller
Private
Fund
Advisers
Requested
x
8.5 hours
Previously
Approved
Not Applicable
Change
Not Applicable
Requested
Large Hedge Previously
Fund
Approved
Advisers
Change
Large
Private
Equity
Advisers
6 responses
Hours Per
Response2
Requested
6 responses
x
8.5 hours
Aggregate
Hours
=
51 hours
=
51 hours
=
51 hours
Not Applicable
Not Applicable
6 response
x
8.5 hours
Previously
Approved
Not Applicable
Change
Not Applicable
Notes:
1. Smaller private fund advisers that advise private equity funds and large private equity
advisers would file current reports under section 6. Large hedge fund advisers would
file current reports under section 5. There are no previously approved estimates for
these proposed amendments because they would be new requirements.
2. We expect that the time to prepare and file a current report would range from 4 hours
to 8.5 hours, depending on the reporting event. Therefore, we propose to use the
upper range (8.5 hours) to calculate estimates.
18
Table 5: 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
63 responses4
x
0.25 hours
=
15.75 hours
Previously
Approved
45 responses
x
0.25 hours
=
11.25 hours
Change
18 responses
Requested
232 responses5
x
0.25 hours
=
58 hours
Previously
Approved
54 responses
x
0.25 hours
=
13.5 hours
Change6
178 responses
0 hours
4.5 hours
0 hours
44.5 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 must file limited information on Form PF 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
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. Under the proposal, temporary hardship
exemptions would be available for current reporting, as discussed in section II. This
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 aggregated number of
responses.
4. Private Funds Statistics show 568 advisers filed quarterly reports in the fourth quarter
of 2020. Based on filing data from the last five years, an average of 11.1 percent of
them filed a transition filing. (568 x 0.111 = 63 responses.)
5. Private Funds Statistics show 3,359 advisers filed Form PF in the fourth quarter of
19
2020. Based on filing data from the last five years, an average of 6.9 percent of them
filed a final filing. (3,359 x 0.069 = approximately 232 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 there were 3,359 private fund advisers who filed Form PF. (3,359 /
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, (3) current reporting, and (4) 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.
20
Table 6: Annual Monetized Time Burden of Initial Filings
Respondent1
Smaller
Private
Fund
Advisers
Requested
Previously
Approved
Change
Large
Hedge
Fund
Advisers
Requested
Large
Liquidity
Fund
Advisers
Requested
Large
Private
Equity
Advisers
Requested
Previously
Approved
Change
Previously
Approved
Change
Per
Response2
Per Response
Amortized
Over 3 years3
Aggregate
Number of
Responses4
$13,6205 ÷ 3 = $4,540 x 313 responses =
$13,460
x 272 responses =
$160
41 responses
$104,4236 ÷ 3 = $34,808 x
$103,123
x
$1,300
$63,460
x
$1,433
$80,3258 ÷ 3 = $26,775 x
Previously
Approved
$63,460
Change
$16,865
x
$3,661,120
($2,240,100)
$487,312
17 responses =
$1,753,091
($1,265,779)
1 responses =
$21,631
2 responses =
$126,920
(1) responses
($105,289)
42 responses =
$1,124,550
9 responses =
$571,140
33 responses
21
$1,421,020
14 responses =
(3) responses
$64,8937 ÷ 3 = $21,631 x
Aggregate
Monetized
Time Burden
Amortized
Over 3 Years
$553,410
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 $316 per hour and a senior risk
management specialist at a cost of $365 per hour. Smaller private fund advisers generally
would not realize significant benefits from or incur significant costs for system
configuration or automation because of the limited scope of information required from
smaller private fund advisers. (($316 per hour x 0.5) + ($365 per hour x 0.5)) x 40 hours
per response = $13,620.
6. For large hedge fund advisers, we estimate that for the initial report, of a total estimated
burden of 325 hours, approximately 195 hours will most likely be performed by compliance
professionals and 130 hours will most likely be performed by programmers working on
system configuration and reporting automation. Of the work performed by compliance
professionals, we anticipate that it will be performed equally by a compliance manager at a
cost of $316 per hour and a senior risk management specialist at a cost of $365 per hour. Of
the work performed by programmers, we anticipate that it will be performed equally by a
senior programmer at a cost of $339 per hour and a programmer analyst at a cost of $246
per hour. (($316 per hour x 0.5) + ($365 per hour x 0.5)) x 195 hours = $66,397.50. (($339
per hour x 0.5) + ($246 per hour x 0.5)) x 130 hours = $38,025. $66,397.50 + $38,025 =
$104,422.50, rounded to $104,423.
7. For large liquidity fund advisers, we estimate that for the initial report, of a total estimated
burden of 202 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 121 hours for compliance professionals and 81 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 $316 per hour and a senior risk management
22
specialist at a cost of $365 per hour. Of the work performed by programmers, we anticipate
that it will be performed equally by a senior programmer at a cost of $339 per hour and a
programmer analyst at a cost of $246 per hour. (($316 per hour x 0.5) + ($365 per hour x
0.5)) x 121 hours = $41,200.50. (($339 per hour x 0.5) + ($246 per hour x 0.5)) x 81 hours
= $23,692.50. $41,200.50 + $23,692.50 = $64,893.
8. For large private equity advisers, we expect that for the initial report, of a total estimated
burden of 250 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 150 hours for compliance professionals and 100 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 $316 per hour and a senior risk management
specialist at a cost of $365 per hour. Of the work performed by programmers, we anticipate
that it will be performed equally by a senior programmer at a cost of $339 per hour and a
programmer analyst at a cost of $246 per hour. (($316 per hour x 0.5) + ($365 per hour x
0.5)) x 150 hours = $51,075. (($339 per hour x 0.5) + ($246 per hour x 0.5)) x 100 hours =
$29,250. $51,075 + $29,250 = $80,325.
23
Table 7: 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
$4,2303 x
2,114 responses4 =
$8,942,220
$4,173.75 x
2,055 responses =
$8,577,056
$56.25
59 responses
Requested
$42,3005 x
2,124 responses6 =
$89,845,200
Previously
Approved
$41,737.50 x
2,148 responses =
$89,652,150
Requested
Previously
Approved
Change
Change
Large
Liquidity
Fund Advisers
Aggregate
Number of
Responses
$562.50
(24 responses)
$365,164
$193,050
Requested
$20,0227 x
88 responses8 =
$1,761,936
Previously
Approved
$29,216.25 x
80 responses =
$2,337,300
Change9
($9,194.25)
Requested
$35,25010 x
Previously
Approved
$27,825 x
Change
$7,425
8 responses
($575,364)
351 responses11 =
$12,372,750
313 responses
$8,709,225
38 responses
$3,663,525
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
aggregate number of responses. 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 $316 per hour, (2) a
senior compliance examiner at a cost of $243, (3) a senior risk management specialist
at a cost of $365 per hour, and (4) a risk management specialist at a cost of $203 an
hour. ($316 x 0.25 = $79) + ($243 x 0.25 = $60.75) + ($365 x 0.25 = $91.25) + ($203
x 0.25 = $50.75) = $281.75, rounded to $282 per hour. To calculate the cost per
response for each respondent, we used the hours per response from Table 3: Annual
24
Hour Burden Estimates for Ongoing Annual and Quarterly Filings.
3. Cost per response for smaller private fund advisers: ($282 per hour x 15 hours per
response = $4,230 per response.)
4. (2,114 smaller private fund advisers x 1 response annually = 2,114 aggregate
responses.)
5. Cost per response for large hedge fund advisers: ($282 per hour x 150 hours per
response = $42,300 per response.)
6. (531 large hedge fund advisers x 4 responses annually = 2,124 aggregate responses.)
7. Cost per response for large liquidity fund advisers: ($282 per hour x 71 hours per
response = $20,022 per response.
8. (22 large liquidity fund advisers x 4 responses annually = 88 aggregate responses.)
9. The previously approved estimates appear to have mistakenly used a different amount
of hours per response (105 hours), rather than 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 71 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: ($282 per hour x 125 hours per
response = $35,250 per response.)
11. (351 private equity advisers x 1 response annually = 351 aggregate responses.)
25
Table 8: Annual Monetized Time Burden of Current Reporting
Per
Response2
Respondent1
Requested
Smaller Private
Fund Advisers
Large Hedge Fund
Advisers
Large Private
Equity Advisers
Aggregate
Number of
Responses3
$4,182 x 6 responses =
Previously
Approved
Change
Aggregate
Monetized
Time Burden
$25,092
Not Applicable
Not Applicable
Requested
$3,5384 x 6 responses =
Previously
Approved
Not Applicable
Change
Not Applicable
Requested
$4,182 x 6 responses =
Previously
Approved
Not Applicable
Change
Not Applicable
$21,228
$25,092
Notes:
1. Smaller private fund advisers that advise private equity funds and large private
equity advisers would file current reports under section 6. Large hedge fund
advisers would file current reports under section 5. There are no previously
approved estimates for these proposed amendments because they would be new
requirements.
2. For the cost per response for smaller private fund advisers and large private equity
advisers, we estimate that, depending on the circumstances, different legal
professionals at the adviser would work on the section 6 current report. We
estimate that the time costs for a legal professional to be approximately $492,
which is a blended average of hourly rate for a deputy general counsel ($610) and
compliance attorney ($373). (8.5 hours to file a section 6 current report x $492 per
hour for a legal professional = $4,182).
3. See Table 4: Annual Hour Burden Estimates for Current Reporting.
4. For the cost per response for large hedge fund advisers, we estimate that,
depending on the circumstances, different legal professionals and financial
professionals at the advisers would work on the section 5 current report because
the reporting events may require both legal and quantitative analysis. We estimate
that the time costs for a legal professional to be approximately $492, which is a
blended average of hourly rate for a deputy general counsel ($610) and compliance
attorney ($373). We estimate that the time costs for a financial professional to be
approximately $331, which is a blended average hourly rate for a senior risk
management specialist ($365) and a financial reporting manager ($297). Of the
26
total 8.5 hours that a section 5 current report would take, we estimate that an
adviser would spend on average 4.5 hours of legal professional time and 4 hours of
financial professional time to prepare, review, and submit a current report pursuant
to section 5. (4.5 hours x $492 per hour for a legal professional = $2,214) + (4
hours x $331 per hour for a financial professional = $1,324) = $3,538.
27
Table 9: 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
Temporary
Hardship Requests
Requested
Previously
Approved
Change
Aggregate
Number of
Responses2
Aggregate
Monetized
Time Burden
$183 x
63 responses =
$1,134
$17.75 x
45 responses =
$798.75
18 responses
$335.25
$0.75
Requested
$184 x
232 responses =
$4,176
Previously
Approved
$17.75 x
54 responses =
$958.50
Change
$0.75
Requested
$2225 x
3 responses =
$666
Previously
Approved
$221.63 x
4 responses =
$886.52
Change
$0.37
178 responses
(1) responses
$3,217.50
($220.52)
Notes:
1. All changes are due to using updated data concerning wage rates and the number of
responses.
2. See Table 5: 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 $72 an hour. (0.25 hours x $72 = $18.)
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 $72 an hour. (0.25 hours x $72 = $18.)
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 $316 and a
general clerk would perform three-eighths of the work at a cost of $64. (1 hour x ((5/8
of an hour x $316 = $197.5) + (3/8 of an hour x $64 = $24)) = $221.5 per response.
28
e.
Summary of Estimates and Change in Burden
Table 10: Aggregate Annual Estimates
Requested
Previously
Approved
3,388 respondents2
3,225 respondents
163 respondents3
5,363 responses4
5,056 responses
307 responses5
Time Burden
409,797 hours6
409,768 hours
29 hours7
Monetized Time Burden
(Dollars)
$116,054,0078
$122,152,100.25
($6,098,093)9
$1,739,82511
$3,628,850
($1,889,025)12
Description1
Respondents
Responses
External Cost Burden
(Dollars)10
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 fourth quarter
of 2020: 2,427 smaller private fund advisers + 545 large hedge fund advisers + 23 large
liquidity fund advisers + 364 large private equity advisers = 3,359 advisers. 3,359
advisers + 29 additional large private equity advisers filing for the first time as a result
of the proposed threshold = 3,388 respondents.
3. Changes are due to (1) the proposed amendment to reduce the filing threshold for large
private equity advisers and (2) using updated data.
4. For initial filings (Table 2): (313 smaller private fund adviser responses + 14 large
hedge fund adviser responses + 1 large liquidity fund adviser response + 42 large
private equity adviser responses = 370 responses.) For ongoing annual and quarterly
filings (Table 7): 2,114 smaller private fund adviser responses + 2,124 large hedge fund
adviser responses + 88 large liquidity fund adviser responses + 351 large private equity
adviser responses = 4,677 responses.) For current reporting (Table 4): (6 smaller
private fund adviser responses + 6 large hedge fund adviser responses + 6 large private
equity adviser responses = 18 responses.) (370 responses for initial filings + 4,677
responses for ongoing annual and quarterly filings + 18 responses for current reporting
+ 63 responses for transition filings + 232 responses for final filings + 3 responses for
temporary hardship requests = 5,363 responses.)
5. Changes are due to (1) the proposal to add current reporting requirements, (2) the
proposal to reduce the filing threshold for large private equity advisers, and (3) updated
data concerning the number of filers.
29
6. For initial filings: (4,069 hours for smaller private fund advisers + 1,512 hours for large
hedge fund advisers + 67 hours for large liquidity fund advisers + 3,486 hours for large
private equity advisers = 9,134 hours). For ongoing annual and quarterly filings:
(31,710 hours for smaller private fund advisers + 318,600 hours for large hedge fund
advisers + 6,248 for hours large liquidity fund advisers + 43,875 hours for large private
equity advisers = 400,433 hours). For current reporting: (51 hours for smaller private
fund advisers + 51 hours for large hedge fund advisers + 51 hours for large private
equity advisers = 153 hours.) (9,134 hours for initial filings + 400,433 for ongoing
annual and quarterly filings + 153 hours for current reporting + 15.75 hours for
transition filings + 58 hours for final filings + 3 hours for temporary hardship requests
= 409,796.75 hours, rounded to 409,797 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: ($1,421,020 for smaller private fund advisers + $487,312 for large
hedge fund advisers + $21,631 for large liquidity fund advisers + $1,124,550 for large
private equity advisers = $3,054,513). For ongoing annual and quarterly filings:
($8,942,220 for smaller private fund advisers + $89,845,200 for large hedge fund
advisers + $1,761,936 for large liquidity fund advisers + $12,372,750 for large private
equity advisers = $112,922,106). For current reporting: ($25,092 for smaller private
equity fund advisers + $21,228 for large hedge fund advisers + $25,092 for large
private equity advisers = $71,412). ($3,054,513 for initial filings + $112,922,106 for
ongoing annual and quarterly filings + $71,412 for current reporting + $1,134 for
transition filings + $4,176 for final filings + $666 for temporary hardship requests =
$116,054,007.)
9. Although we would expect the monetized time 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 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 6: Annual Monetized Time
Burden of Initial Filings. The proposed methodology is designed to more accurately
reflect the estimates.
10. See Section A.13 of this Supporting Statement for a discussion of the external cost
burden. For annual, quarterly, and initial filing costs: ($364,050 for smaller private
fund advisers + $560,338 for large hedge funds + $30,467 for large liquidity fund
advisers + $754,614 for large private equity advisers = $1,709,469). For current
reporting: ($5,952 for smaller private fund advisers + $18,452 for large hedge funds +
$5,952 for large private equity advisers = $30,356). ($1,709,469 annual, quarterly, and
initial cost external cost burden + $30,356 current reporting external cost burden =
30
$1,739,825 total annual external cost burden.)
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 11: 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.
13.
Cost to Respondents
We estimate an aggregate annual estimated external cost burden of $1,739,825, which
represents a decrease of $1,889,025 from the previously approved estimate of $3,628,850. See
Table 10: Aggregate Annual Estimates, above, which summarizes the total aggregated annual
estimated external cost burden. Also see the tables below, which detail the annual external cost
burden estimates for (1) initial filings as well as ongoing annual and quarterly filings and (2)
current reporting. 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.
31
Table 11: 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
External
Cost of
Initial
Filing4
Aggregate
External
External
Cost of
Number
Cost of
of
Initial
Initial Filing
Filing
Initial
Amortized
6
Filings Amortized
Over 3
Over 3
Years5
Years7
Total
Aggregate
External
Cost8
1 x $150 = $150
Not Applicable
$364,0509
1 x $150 = $150
Not Applicable
$349,050
No Change
$15,000
0
$0
$0
Requested
Large
Previously
Hedge
Approved
Fund
Advisers Change
4 x $150 = $600 $50,000 ÷ 3 = $16,667 x 14 =
$233,338
$560,33810
4 x $150 = $600 $50,000
$850,000
$1,182,400
($616,662)
($622,062)
Requested
Large
Liquidity Previously
Fund
Approved
Advisers
Change
4 x $150 = $600 $50,000 ÷ 3 = $16,667 x
1 =
$16,667
$30,46711
4 x $150 = $600 $50,000
2 =
$100,000
$113,200
($83,333)
($82,733)
Requested
Large
Private Previously
Approved
Equity
Advisers Change
1 x $150 = $150 $50,000 ÷ 3 = $16,667 x 42 =
$700,014
$754,61412
1 x $150 = $150 $50,000
$450,000
$498,300
$250,014
$256,314
0
0
0
$0
$0
$0
$0
$0
$0
x 17 =
$0
(3)
x
$0
$0
32
(1)
x
9 =
33
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 required on Form PF.
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. 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. We continue to estimate that the same cost range would
apply.
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) using
updated data and (2) amortizing the external cost of initial filings over three years, which the previously
approved PRA did not calculate. Changes concerning large private equity advisers also are due to the
proposed amendment to reduce the filing threshold.
8. Changes to the total aggregate external cost are due to (1) using updated data and (2) amortizing the external
cost of initial filings over three years, which the previously approved PRA did not calculate. Changes
concerning large private equity advisers also are due to the proposed amendment to reduce the filing
threshold.
9. Private Funds Statistics show 2,427 smaller private fund advisers filed Form PF in the fourth quarter of 2020.
(2,427 smaller private fund advisers x $150 total filing fees) = $364,050 aggregate cost.
10. Private Funds Statistics show 545 large hedge fund advisers filed Form PF in the fourth quarter of 2020.
(545 large hedge fund advisers x $600 total filing fees) + $233,338 total external costs of initial filings,
amortized over three years = $560,338 aggregate cost.
11. Private Funds Statistics show 23 large liquidity fund advisers filed Form PF in the fourth quarter of 2020.
(23 large liquidity fund advisers x $600 total filing fees) + $16,667 total external costs of initial filings,
amortized over three years = $30,467 aggregate cost.
12. Private Funds Statistics show 364 large private equity advisers filed Form PF in the fourth quarter of 2020.
(364 large private equity advisers x $150 total filing fees) + $700,014 total external costs of initial filings,
amortized over three years = $754,614 aggregate cost.
33
Table 12: Annual External Cost Burden for Current Reporting
Respondent1
Smaller
Private
Fund
Advisers
Large
Hedge
Fund
Advisers
Large
Private
Equity
Advisers
Cost of
Outside
Counsel Per
Current
Report3
Aggregate
Number of
Responses2
Requested
6
x
$992
Aggregate
Cost of
Outside
Counsel
One-time Cost
of System
Changes
=
Not Applicable
$5,952
Previously
Approved
Not Applicable
Change
Not Applicable
Requested
Previously
Approved
6
x
$992
=
$5,952
$12,5005
$18,452
Not Applicable
$5,952
$5,952
Not Applicable
Not Applicable
Change
Requested
Total
Aggregate
External
Cost4
6
x
$992
=
$5,952
Previously
Approved
Not Applicable
Change
Not Applicable
Advisers would pay filing fees, the amount of which would be determined in a separate
action.
34
Notes:
1. In a separate action, the SEC would approve filing fees that reflect the reasonable costs
associated with current report filings and the establishment and maintenance of the filing
system. (See 15 U.S.C. 80b-4(c).) We estimate that advisers would incur costs of outside
counsel for each current report. We also estimate that large hedge fund advisers may incur
a one-time cost to modify existing systems or deploy new systems to support section 5
current reporting, acquire or use hardware to perform computations, or otherwise process
data to identify reporting events set forth in section 5, because such reporting events are
quantitative. We estimate that such costs would not apply to advisers subject to current
reporting requirements in proposed section 6, because the reporting events are more
qualitative. There are no previously approved estimates for these proposed amendments
because they would be new requirements.
2. See Table 4: Annual Hour Burden Estimates for Current Reporting.
3. We estimate the cost for outside legal counsel is $496. This is based on an estimated $400
per hour cost for outside legal services, as used by the Commission for these services in the
“Exemptions for Advisers to Venture Capital Funds, Private Fund Advisers With Less
Than $150 Million Under Management, and Foreign Private Advisers” final rule, Advisers
Act Release No. 3222 (June 22, 2011) [76 FR 39646 (July 6, 2011)], as inflated using the
Consumer Price Index. We estimate that approximately two hours of the total legal
professional time that would otherwise be spent on current reporting for sections 5 and 6,
would be shifted from in-house legal professionals to outside legal counsel. (2 hours x
$496 for outside legal services = $992.)
4. (Aggregate cost of outside counsel) + (one-time cost of system changes, as applicable) =
total aggregate cost.
5. We estimate that the one-time external cost burden would range from $0 to $12,500, per
adviser. This range of costs reflects the fact that the cost to any adviser might depend on
how many funds or the types of funds it manages, the state of its existing systems, and the
complexity of its business.
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 3,388 respondents represents an increase of 163
respondents from the previously approved estimate of 3,225 respondents. The aggregate annual
estimate of 5,363 responses represents an increase of 307 responses from the previously
approved estimate of 5,056 responses. The aggregate annual estimated time burden of 409,797
hours represents an increase of 29 hours from the previously approved estimate of 409,768
35
hours. The aggregate annual estimated monetized time burden of $116,054,007 represents a
decrease of $6,098,093 from the previously approved estimate of $122,152,100.25. The
aggregate annual estimated external cost burden of $1,739,825 represents a decrease of
$1,889,025 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.
16.
Information Collection Planned for Statistical Purposes
Not applicable.
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.
36
| File Type | application/pdf |
| File Modified | 2022-02-23 |
| File Created | 2022-02-23 |