- This memo serves as a reminder that private equity funds (and their managers/advisers) are subject to various types of regulation under U.S. federal law and non-U.S. law.
- All registered investment advisers who advise private equity funds will be required to file an annual update to Form PF, the systemic risk reporting form, within 120 days after the end of the fiscal year.
- Managers or general partners of private funds that trade “commodity interests” and rely on an exemption from registration with the U.S. CFTC must reaffirm such exemption within 60 days following December 31.
- Marketing a fund in Europe may give rise to ongoing AIFMD disclosure obligations.
Please see attached a calendar with links to Who/What/When/How sheets on regulatory filings commonly applicable to private fund sponsors, including, among others, Form ADV, Form PF, Exchange Act filings, CPO/CTA exemption filings, and BEA and TIC forms. The Who/What/When/How sheets provide summaries on who is required, links to what forms are required to be filed, information on when the filings are due, and how the filings may be submitted, as well as links to general information, FAQs and other guidance from the applicable governmental entity. While the Who/What/When/How sheets provide summaries on to whom the filings apply, we recommend seeking legal advice concerning the applicability to your firm because there may be complications, including with respect to the consolidation rules.
This Calendar does not cover all possible filing obligations under U.S. or non-U.S. law, including filing obligations relating to tax, ERISA or non-U.S. regulatory regimes. Furthermore, this Calendar focuses on the regulatory obligations applicable to investment advisers to private funds; the filing obligations applicable to other types of investment advisers (particularly investment advisers to separately management accounts or retail investors) may be different.
This Calendar is for informational purposes only and is not intended to be legal advice. Please reach out to us with respect to any questions you may have on the applicability of any of these regulatory filing obligations.
What’s New This Year?
In 2023, the Securities and Exchange Commission (the “SEC”) continued its rapid rulemaking by adopting several rules and amendments that created new or amended reporting requirements applicable to private fund sponsors.
Set out below is a summary of some of these developments.
Beginning in 2024, institutional investment managers that file Form 13F will also be required to file Form N-PX disclosing their voting decisions with respect to say-on-pay matters. Filings are due on August 31, 2024 and each year thereafter on that date. A manager must report on Form N-PX securities over which it “exercises voting power,” which is determined by a two-part test: (a) the manager has the power to vote or direct the voting of the security; and (b) exercises this power to influence a voting decision for the security. Managers must report on Form N-PX, the language that is on the form of proxy and identify the category of the proxy vote from a pre-populated list. Further, the manager must: (i) disclose the number of shares voted, with the number “0” entered if no shares were voted; (ii) disclose the number of shares loaned that the manager did not recall; and (iii) indicate how the shares disclosed in (i) above were voted (for, against, or abstain). Each report on Form N-PX must cover the most recent 12-month period ending June 30.
Beginning on December 11, 2023, private equity fund advisers will be required to file quarterly reports on Form PF that contain information on the occurrence of any of the following events within 60 days of the relevant fiscal quarter-end:
- the execution of an adviser-led secondary transaction;
- the removal of a fund’s general partner; and
- an investor election to terminate a fund or an investment period.
The first new quarterly report will be due at the beginning of March, 2024 assuming a reportable event has occurred.
In addition to private equity fund advisers, large hedge fund advisers (those with at least $1.5 billion in fund assets under management) will be required to file current reports with 72 hours of specific events occurring (“current events”). Certain of the current events are subject to a 10-day rolling determination period (extraordinary investment losses and margin/collateral increases and 72-hour rolling periods for terminations or material restrictions in prime broker relationships). Other current events that do not have a rolling period or specific look-back period must be reported within 72 hours of occurring.
Beginning in January 2025, private equity fund advisers with $2 billion or more in fund assets under management will be required to annually report on Form PF Filing the following events:
- general partner or limited partner clawbacks;
- fund-level borrowing;
- events of default;
- fund strategy by percentage of deployed capital; and
- bridge financing to controlled portfolio companies.
The first new annual report will be due in April of 2025.
Schedule 13D and Schedule 13G
Beginning in 2024, investors filing a Schedule 13D and Schedule 13G will be required to submit their filings within a shorter timeframe than previously required (now generally within five days after acquisition). Compliance with the amended Schedule 13D filing deadlines will be required beginning February 5, 2024, whereas compliance with amended Schedule 13G filing deadlines will be required beginning September 30, 2024. Under Exchange Act Sections 13(d) and 13(g) and Regulation 13D-G, any person or group of persons owning or acquiring more than 5% of any covered class of equity securities is required to publicly file with the SEC either a Schedule 13D or 13G, depending on the nature of its ownership and the circumstances of its acquisition of securities. The new filing deadlines include new deadlines for passive investors, institutional investors, and exempt investors. Please see our alert on the new deadlines here: link
Corporate Transparency Act
Effective January 1, 2024, the Corporate Transparency Act and its implementing regulations will require many privately held companies to disclose certain personal information about their beneficial owners, senior officers and other control persons to the U.S. Treasury Department’s Financial Crimes Enforcement Network (“FinCEN”). The new requirements take effect on January 1, 2024, for entities created or registered to do business in the United States on or after that date, and on January 1, 2025, for entities created or registered to do business before January 1, 2024. In other words, there is no legacy relief for currently existing companies that are in scope for reporting. Entities formed or first registered to do business in a U.S. state on or after January 1, 2024 and before January 1, 2025 must file an initial report within 90 calendar days of public notice or receipt of actual notice that the creation or registration has become effective. Entities formed or first registered on or after January 1, 2025 will have 30 days to file an initial report.
A reporting company will be required to file a report with FinCEN to disclose information about itself as well as its “beneficial owners” (i.e., individuals who own or control 25% or more of its ownership interests, its senior officers and certain other control persons). Beneficial ownership information that will be disclosed includes:
- each beneficial owner’s name, date of birth and residential street address;
- a unique identifying number for each beneficial owner from an acceptable identification document (e.g., driver’s license, state ID, passport), along with the name of the state or jurisdiction that issued the document; and
- an image of the identifying document.
Companies formed or first registered after January 1, 2024 will also need to report information for one or two “company applicants” (i.e., the individual who directly files the document that creates or first registers the company and, if different, the individual who is primarily responsible for directing or controlling such filing).
Certain reporting exemptions may apply to private fund sponsors and certain of their fund clients.
Each reporting company must file an initial report by the deadlines noted above. Information will need to be updated within 30 days of when a change occurs or an error is discovered in any of the reported information.