unsecured exposure of credit counterparties to the fund, and the
committed term of that leverage, which may be important to monitor if
the fund comes under stress. Collecting financing data broken down on a
monthly basis should provide FSOC with sufficient granularity to
identify trends.
    Finally, Item E of section 2b would require the private fund
adviser to report information about each qualifying hedge fund's
investor composition and liquidity. For example, it contains questions
about the fund's side pocket and gating arrangements and provides for a
breakdown of the percentage of the fund's net asset value that is
locked in for different periods of time.\128\ We believe this
information may be important in allowing FSOC to monitor the hedge
fund's susceptibility to failure through investor redemptions in the
event the fund experiences stress due to market or other factors.
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    \128\ A side pocket is a type of account used by private funds
to separate illiquid assets from other more liquid fund investments.
Only investors in the hedge fund at the time the asset is put in the
side pocket (and not future investors) will be entitled to a share
of proceeds from that investment. A gate is a restriction imposed by
the manager of a private fund on permissible redemptions from the
fund during a certain period of time. The standards for imposing
suspensions and gates may vary among funds, so in responding to
these questions, an adviser would be expected to make a good faith
determination as to which provisions of the reporting fund's
governing documents would likely be triggered during conditions that
it views as significant market stress.
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    The information in proposed section 2b also is designed to address
requirements under section 404 of the Dodd-Frank Act for records and
reports that the SEC requires of private fund advisers, such as
monitoring the amount of assets under management and the use of
leverage, counterparty credit risk exposure, trading and investment
positions, and the types of assets held. We request comment on the
information that we propose requiring large hedge fund advisers to
report under section 2. Is there additional information with respect to
the types of their investments, use of leverage, or counterparties that
we should require and why? Have we asked for appropriate time period
breakdowns of the fund's liquidity in terms of asset liquidity,
financing liquidity, and investor liquidity? Is there other information
we could ask to assess hedge funds' potential impact on liquidity in
particular markets? Would the threshold in the proposed form capture
significant central clearing counterparties? Does the proposed form ask
sufficient questions regarding the fund's collateral practices to
ensure that FSOC will be able to monitor the fund's unsecured exposure
to significant counterparties? Should the form require reporting of
hedge funds' investment in different types of instruments or
commodities than those proposed in questions 23 and 27?
    Are there risk metrics or additional market factors that we should
require? Should we require the proposed market factors but with
different specified changes? Stress testing is an important metric for
FSOC's assessment of potential systemic risk posed by hedge funds, but
we understand that the type of stress testing conducted varies

substantially depending on the strategy of the particular hedge fund
and among hedge funds pursuing the same strategy. Is there a better way
for the form to assess the effects of stresses on hedge funds than the
stress testing questions included in the proposed form? Should we
request the geographic breakdown of the hedge fund's investments for
different geographic regions or countries? Are there existing
collections of data broken down by geographic regions or countries with
which we should be consistent? Should we require more or less detailed
information regarding the types of assets in which the fund invests?
    Is there information that we should not require and why? Is there
information that we should require large hedge fund advisers to report
regarding all of the hedge funds they manage that we only propose
requiring qualifying hedge funds to report? Is there information in
proposed Form PF that is unlikely to be reported in a comparable or
meaningful fashion such that FSOC would be unable to draw any useful
conclusions or insights for purposes of assessing systemic risk? If so,
how could changes to the question or instructions to the question
improve the utility of the information the form seeks? Are there any
disclosure requirements in the SEC's proposed amendments to Form ADV
(which will be publicly available) that should instead be reported
through Form PF (which will not be publicly available) or vice versa?
\129\
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    \129\ See Implementing Release, supra note 9, for a discussion
of the SEC's proposed amendments to Form ADV.
---------------------------------------------------------------------------

    We request comment more generally on the information we propose
requiring in Form PF with respect to hedge funds and their advisers. Is
there additional information that would be helpful to FSOC in
monitoring for systemic risk with respect to hedge funds?
    We note that certain data in the proposed form, while filed with
the Commissions on an annual or quarterly basis, would have to be
reported on a monthly basis. In addition to providing more granular
data to allow FSOC to better identify trends, this aspect of the
proposal is designed to mitigate the ability of an adviser to ``window
dress,'' or manipulate certain reported data to mask activities or
risks undertaken by the private funds it manages.
    Is there information that should be broken down further and
reported as of smaller time increments, such as weekly, or as of larger
time increments? Is there information that should be reported to show
ranges, averages, high points, or low points during the reporting
period, rather than as of the last day of the month or quarter? If so
what time period should the range or average cover and how should it be
calculated? We note that we have considered in other contexts different
ways of disclosing information that can fluctuate during a reporting
period.\130\ Are there approaches in these other contexts that should
be used in Form PF? What would be the best method of avoiding ``window
dressing'' in the form and why? Is there information that should not be
reported on a monthly basis or, in contrast, information that should be
reported on a monthly basis (in each case, when the information is
filed with the Commissions quarterly or annually)? Please explain your
response.
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    \130\ See Short-Term Borrowings Disclosure, Securities Act
Release No. 9143 (Sept. 17, 2010), at section II.A [75 Fed. Reg.
59866 (Sept. 28, 2010)].
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3. Section 3
    Form PF would require private fund advisers advising a liquidity
fund and managing at least $1 billion in combined liquidity fund and
registered money market fund assets as of the close of business on any
day in the reporting period to complete and file the information on
section 3.\131\ As discussed above, to the extent that liquidity funds
function as unregistered substitutes for money market funds or
otherwise share certain basic characteristics of money market funds,
they may be susceptible to runs and thus have the potential to pose
systemic risk.\132\
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    \131\ See sections II.A.2 and II.B of this Release for a
discussion of this reporting threshold and the definition of
liquidity fund. For purposes of the $1 billion threshold, an adviser
would have to treat any liquidity funds managed by any of the
adviser's related persons as though they were advised by the
adviser. See proposed Instruction 3 to Form PF. Form PF is a joint
form between the SEC and the CFTC only with respect to sections 1
and 2 of the form. Section 3 of the form, which would require more
specific reporting regarding liquidity funds, would only be required
by the SEC.
    \132\ See section II.A.2 of this Release. The SEC also notes
that institutional investors--the principal investors in liquidity
funds--were the primary participants in the run on money market
funds in September 2008, rather than retail investors. See MMF
Reform Proposing Release, supra note 65.
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    Section 3 would require that these private fund advisers report
certain information for each liquidity fund they manage. The section
includes questions on whether the fund uses the amortized cost method
of valuation and/or the penny rounding method of pricing in computing
its net asset value per share to help determine how the fund might try
to maintain a stable net asset value that could make the fund more
susceptible to runs.\133\ It asks whether the fund as a matter of
policy is managed in compliance with certain provisions of rule 2a-7
under the Investment Company Act of 1940, which is the principal rule
through which the SEC regulates registered money market funds.\134\
This information would assist FSOC in assessing the extent to which the
liquidity fund is being managed consistent with restrictions imposed on
registered money market funds that might mitigate their likelihood of
posing systemic risk.
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    \133\ See proposed questions 43 and 44 of Form PF.
    \134\ See proposed question 45 of Form PF. The restrictions in
rule 2a-7 are designed to ensure, among other things, that money
market funds' investing remains consistent with the objective of
maintaining a stable net asset value. Many liquidity funds state in
investor offering documents that the fund is managed in compliance
with rule 2a-7 even though that rule does not apply to liquidity
funds.
---------------------------------------------------------------------------

    Section 3 also would require reporting of certain information
regarding the liquidity fund's portfolio. For example, it would ask,
for each month of the reporting period, for the fund's net asset value,
net asset value per share, market-based net asset value per share,
weighted average maturity (``WAM''), weighted average life (``WAL''),
7-day gross yield, amount of daily and weekly liquid assets, and amount
of assets with a maturity greater than 397 days.\135\ It also would
require the fund to report the amount of its assets invested in
different types of instruments, broken down by the maturity of those
instruments, as well as information for each open position of the fund
that represents 5 percent or more of the fund's net asset value.\136\
This information would assist FSOC in assessing the risks undertaken by
liquidity funds, their susceptibility to runs, and how their
investments might pose systemic risks either among liquidity funds or
through contagion to registered money market funds.
---------------------------------------------------------------------------

    \135\ See proposed question 46 of Form PF. WAM, WAL, daily
liquid assets, and weekly liquid assets are to be calculated in
accordance with rule 2a-7 under the Investment Company Act. The 7-
day gross yield is to be calculated consistent with the methodology
required under Form N-MFP, which must be filed by money market funds
registered with the SEC. See 17 CFR 274.201.
    \136\ See proposed question 47 of Form PF. Proposed question 48
of Form PF would require reporting for each month of the reporting
period, for each of the fund's positions representing 5% or more of
its net asset value, of the position's portion of the fund's net
asset value and sub-asset class.
---------------------------------------------------------------------------

    Item C of Section 3 would require reporting of any secured or
unsecured borrowing of the liquidity fund, broken down by creditor type
and the maturity profile of that borrowing, and of whether the fund has
in place a committed liquidity facility. This information would aid
FSOC in monitoring leverage practices among

liquidity funds and their potential to magnify risks undertaken by the
fund. Finally, Item D of Section 3 would ask for certain information
regarding the concentration of the fund's investor base, gating and
redemption policies, and investor liquidity.\137\ It also would require
reporting of a good faith estimate of the percentage of the fund
purchased using securities lending collateral. The SEC believes this
information would be important in allowing FSOC to monitor the
susceptibility of the liquidity fund to a run in the event the fund
comes under stress and its interconnectedness to securities lending
programs.
---------------------------------------------------------------------------

    \137\ For example, question 52 would require reporting of the
percentage of the reporting fund's equity that is beneficially owned
by the beneficial owner having the largest equity interest in the
fund and of how many investors beneficially own 5% or more of the
fund's equity.
---------------------------------------------------------------------------

    The SEC requests comment on the information that it proposes
requiring in section 3. Is there additional information that the SEC
should require? For example, is there information that the SEC requires
to be reported for registered money market funds on Form N-MFP that the
SEC also should require to be reported on Form PF for liquidity funds?
Should the SEC require reporting of more specific information about the
holdings or types of holdings of these liquidity funds? Is the
threshold for when the private fund adviser is required to report
information in section 3 for an individual liquidity fund appropriate
for purposes of FSOC to be able to monitor for potential systemic risk
in this sector? Is five percent an appropriate threshold for
considering a liquidity fund investment or investor to be significant
for purposes of Form PF reporting? Is our proposed breakdown of the
liquidity fund's asset maturity and investor liquidity appropriate?
4. Section 4
    The SEC is proposing that section 4 of Form PF require private fund
advisers managing at least $1 billion in private equity fund assets as
of the close of business on the last day of the reporting period to
report certain information about each private equity fund they
manage.\138\ Section 4 would require reporting of certain information
about the fund's borrowings and guarantees and the leverage of the
portfolio companies in which the fund invests. Specifically, section 4
would require information about the outstanding balance of the fund's
borrowings and guarantees.\139\ It also would require the adviser to
report the weighted average debt-to-equity ratio of controlled
portfolio companies in which the fund invests and the range of that
debt to equity ratio among these portfolio companies.\140\ It asks for
the maturity profile of its portfolio companies' debt, for the portion
of that debt that is payment-in-kind or zero coupon, and whether the
fund or any of its portfolio companies experienced an event of default
on any of its debt during the reporting period.\141\ It also asks for
the identity of the institutions providing bridge financing to the
adviser's portfolio companies and the amount of that financing.\142\
The SEC believes that this information would allow FSOC to assess to
what extent private equity funds use leverage and the potential
exposure of banks and other lending providers to the larger private
equity funds and their portfolio companies and leverage among portfolio
companies of the larger private equity funds to monitor whether trends
in those areas could pose systemic implications for the portfolio
companies' lenders.
---------------------------------------------------------------------------

    \138\ See section II.B of this Release for a discussion of this
reporting threshold and the definition of ``private equity fund.''
Form PF is a joint form between the SEC and the CFTC only with
respect to sections 1 and 2 of the form. Section 4 of the form,
which would require more specific reporting regarding private equity
funds, would only be required by the SEC.
    \139\ See proposed questions 57 and 58.
    \140\ See proposed questions 59-61. A ``controlled portfolio
company'' is defined as a portfolio company that is controlled by
the private equity fund, either alone or together with the private
equity fund's related persons or other persons that are part of a
club or consortium investing in the portfolio company. ``Control''
has the same meaning as used in Form ADV, and generally means the
power, directly or indirectly, to direct the management or policies
of a person, whether through ownership of securities, by contract,
or otherwise. See proposed Glossary of Terms to Form PF; Glossary of
Terms to Form ADV.
    \141\ See proposed questions 62-64.
    \142\ See proposed question 65.
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    Section 4 also would require reporting of certain information if
the fund invests in any financial industry portfolio company, such as
its name, its debt-to-equity ratio, and the percentage of the portfolio
company beneficially owned by the fund.\143\ This information would
allow FSOC to monitor large private equity funds' investments in
companies that may be particularly important to the stability of the
financial system. Section 4 also would ask whether any of the adviser's
related persons co-invest in any of the fund's portfolio
companies.\144\ Finally, the form would require a breakdown of the
fund's investments by industry and by geography, which should provide
FSOC with basic information about global and industry concentrations
that may be relevant to monitoring risk exposures in the financial
system.\145\
---------------------------------------------------------------------------

    \143\ See proposed question 66. A ``financial industry portfolio
company'' generally is defined as a nonbank financial company, as
defined by section 102(a)(4) of the Dodd-Frank Act, bank or savings
association, bank holding company or financial holding company,
savings and loan holding company, credit union, or Farm Credit
System institution. See proposed Glossary of Terms to Form PF.
    \144\ See proposed question 69.
    \145\ See proposed questions 67 and 68. Industries would be
identified using NAICS codes. ``NAICS'' stands for the ``North
American Industry Classification System,'' and is a system of
industry classifications commonly used in the financial industry.
---------------------------------------------------------------------------

    The SEC requests comment on the information it proposes requiring
regarding private equity funds in section 4. Is there additional
information that the SEC should request and why? For example, are their
additional lending practices used in leveraged buyouts about which the
form should collect information? Are there particular industries in
which private equity funds might invest that could be systemically
important? Should the Form ask additional questions specific to those
industries? Should the form track private equity fund investments in
different geographic and/or industry concentrations than those we have
proposed? Should the SEC request less information and why? Should the
SEC not require any reporting on Form PF specific to private equity
funds? Why or why not?

E. Filing Fees and Format for Reporting

    Under proposed Advisers Act rule 204(b)-1(b), Form PF would need to
be filed through an electronic system designated by the SEC for this
purpose. There may be efficiencies realized if the current Investment
Adviser Registration Depository (``IARD'') platform, which is operated
by the Financial Industry Regulatory Authority, were expanded for this
purpose, such as the possible interconnectivity of Form ADV filings and
Form PF filings, and possible ease of filing with one password. The
filing system would need to have certain features, including being
programmed with special confidentiality protections designed to ensure
the heightened confidentiality protections created for Form PF filing
information under the Dodd-Frank Act but to allow for secure access by
FSOC and other regulators as permitted under the Dodd-Frank Act.
    The SEC separately will decide on the system to be selected for the
electronic filing of Form PF. That determination will be reflected in a
separate notice.
    Under the proposed rule, advisers required to file Form PF would be
required to pay to the operator of the Form PF filing system fees that
have

been approved by the SEC.\146\ We anticipate that Large Private Fund
Advisers' filing fees would be set at a higher amount because their
filings would be responsible for a larger proportion of system needs
due to their more frequent and extensive filings. The SEC in a separate
action would approve filing fees that reflect the reasonable costs
associated with the filings and the establishment and maintenance of
the filing system.\147\
---------------------------------------------------------------------------

    \146\ See proposed Advisers Act rule 204(b)-1(d).
    \147\ See section 204(c) of the Advisers Act.
---------------------------------------------------------------------------

    While we are not requiring that the information be filed in
eXtensible Markup Language (``XML'') tagged data format, we expect to
look for a filing system that could accept information filed in XML
format. We intend to establish data tags to allow Form PF to be
submitted in XML format with the SEC. Accordingly, advisers would be
able to file the information in Form PF in XML format if they choose.
We believe that certain advisers may prefer to report in XML format
because it allows them to automate aspects of their reporting and thus
minimize burdens and generate efficiencies for the adviser. We
anticipate that we may eventually require Form PF filers to tag data
submitted on Form PF using a refined, future taxonomy defined by us,
working in collaboration with the industry. Thereafter, the usability
of data contained in Form PF is expected to increase greatly because
tagged data would be easier to sort and analyze. We note that private
initiatives are underway to create such taxonomies.\148\ We request
comment on our proposed system of electronic filing. Should we require
that all filings be done in XML format? Should we allow or require the
form to be provided in a format other than XML, such as eXtensible
Business Reporting Language (``XBRL'')? Is there another format that is
more widely used or would be more appropriate for the required data?
Should smaller and/or Large Private Fund Advisers be charged different
amounts than what we have anticipated charging? If so, why?
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    \148\ See, e.g., http://www.operastandards.org.
---------------------------------------------------------------------------

III. General Request for Comment

    The Commissions request comment on the rules and form proposed in
this Release and comment on other matters that might have an effect on
the proposals contained in this Release. Commenters should provide
empirical data to support their views.

IV. Paperwork Reduction Act

CFTC

    Proposed CEA rule 4.27(d) does not impose any additional burden
upon registered CPOs and CTAs that are dually registered as investment
advisers with the SEC. By filing the Form PF with the SEC, these dual
registrants would be deemed to have satisfied certain of their filing
obligations with the CFTC, and the CFTC is not imposing any additional
burdens herein. Therefore, any burden imposed by Form PF through
proposed CEA rule 4.27(d) on entities registered with both the CFTC and
the SEC has been accounted for within the SEC's calculations regarding
the impact of this collection of information under the Paperwork
Reduction Act of 1995 (``PRA'').\149\
---------------------------------------------------------------------------

    \149\ 44 U.S.C. 3501-3521.
---------------------------------------------------------------------------

SEC

    Section 404 of the Dodd-Frank Act, which amends section 204(b) of
the Advisers Act, directs the SEC to require private fund advisers to
file reports containing such information as the SEC deems necessary and
appropriate in the public interest and for investor protection or for
the assessment of systemic risk. Proposed rule 204(b)-1 and Form PF
under the Advisers Act, which would implement this requirement of the
Dodd-Frank Act. Proposed Form PF contains a new ``collections of
information'' within the meaning of the PRA.\150\ The title for the new
collection of information is: ``Form PF under the Investment Advisers
Act of 1940, reporting by investment advisers to private funds.'' For
purposes of this PRA analysis, the paperwork burden associated with the
requirements of proposed rule 204(b)-1 is included in the collection of
information burden associated with proposed Form PF and thus does not
entail a separate collection of information. The SEC is submitting this
collection of information to the Office of Management and Budget
(``OMB'') for review in accordance with 44 U.S.C. 3507(d) and 5 CFR
1320.11. 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 control number.
---------------------------------------------------------------------------

    \150\ 44 U.S.C. 3501-3521.
---------------------------------------------------------------------------

    Proposed Form PF is intended to provide FSOC with information that
would facilitate fulfillment of its obligations under the Dodd-Frank
Act relating to nonbank financial companies and systemic risk
monitoring.\151\ The SEC also may use the information in connection
with its regulatory and examination programs. The respondents to Form
PF would be private fund advisers.\152\ Compliance with proposed Form
PF would be mandatory for any private fund adviser. Smaller private
fund advisers would be required to file Form PF only on an annual
basis. These smaller private fund advisers would provide a limited
amount of basic information about the operations of the private funds
they advise.\153\ Large Private Fund Advisers would be required to file
Form PF on a quarterly basis reporting additional information regarding
the private funds they advise. The PRA analysis set forth below takes
into account the fact that the additional information proposed Form PF
would require that large hedge fund advisers report would be more
extensive than the additional information required from large liquidity
fund advisers, which in turn would be more extensive than that required
from large private equity fund advisers.\154\
---------------------------------------------------------------------------

    \151\ See sections I.A and II.A of this Release.
    \152\ The requirement to file the form would apply to investment
advisers registered, or required to register, with the SEC that
advise one or more private funds. See proposed rule 204(b)-1(a). It
would not apply to state-registered investment advisers or exempt
reporting advisers.
    \153\ See section II.B of this Release for a description of who
would be required to file Form PF, section II.C of this Release for
information regarding the frequency with which smaller private fund
advisers would be required to file Form PF, and section II.D.1 of
this Release for a description of the information that smaller
private fund advisers would be required to report on Form PF. See
also proposed Instruction 8 to Form PF for information regarding the
frequency with which smaller private fund advisers would be required
to file Form PF.
    \154\ See section II.B of this Release for a description of who
would be required to file Form PF, section II.C of this Release for
information regarding the frequency with which Large Private Fund
Advisers would be required to file Form PF, section II.D.2 of this
Release for a description of the information that large hedge fund
advisers would be required to report on Form PF, and sections II.D.3
and II.D.4 of this Release for a description of the information that
large liquidity and private equity fund advisers would be required
to report on Form PF. See also proposed Instruction 8 to Form PF for
information regarding the frequency with which Large Private Fund
Advisers would be required to file Form PF.
---------------------------------------------------------------------------

    As discussed in section II.B of this Release, the SEC has sought to
minimize the reporting burden on private fund advisers to the extent
appropriate. In particular, the SEC has designed the reporting
frequency based on when it understands advisers to private funds are
already collecting certain information that Form PF would require. In
addition, the SEC has based certain more specific reporting items on
information that it understands large hedge fund advisers frequently
collect

for purposes of reporting to investors in the funds.\155\
---------------------------------------------------------------------------

    \155\ See Report of the Asset Manager's Committee to the
President's Working Group on Financial Markets, Best Practices for
the Hedge Fund Industry (Jan. 15, 2009), available at http://www.amaicmte.org/Public/AMC%20Report%20-%20Final.pdf (discussing
best practices on disclosing to investors performance data, assets
under management, and risk management practices (including on asset
types, geography, leverage, and concentrations of positions) with
which we understand many hedge funds comply).
---------------------------------------------------------------------------

    The information that Form PF would require would be filed through
an electronic filing system expected to be operated by an entity
designated by the SEC. Responses to the information collections would
be kept confidential to the extent permitted by law.\156\
---------------------------------------------------------------------------

    \156\ See supra note 39 and accompanying text.
---------------------------------------------------------------------------

A. Burden Estimates for Annual Reporting by Smaller Private Fund
Advisers

    In the Implementing Release, the SEC estimated that 3,500 currently
registered advisers would become subject to the private fund reporting
requirements included in the proposed amendments to Form ADV.\157\ The
SEC further estimated that 200 advisers to private funds would register
with the SEC as a result of normal growth in the population of
registered advisers and that 750 advisers to private funds would
register as a result of the Dodd-Frank Act's elimination of the private
adviser exemption.\158\ As a result, the SEC estimates that a total of
approximately 4,450 registered investment advisers would become subject
to the proposed private fund reporting requirements in Form ADV.\159\
Because these advisers would also be required to report on Form PF, the
SEC accordingly estimates that approximately 4,450 advisers would be
required to file all or part of Form PF.\160\ Out of this total number,
the SEC estimates that approximately 3,920 would be smaller private
fund advisers, not meeting the thresholds for reporting as Large
Private Fund Advisers.\161\
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    \157\ See section V.B.2.a.ii of the Implementing Release. As
proposed in the Implementing Release, advisers to private funds
would be required to complete Item 7.B and Section 7.B of Schedule D
to the amended Form ADV.
    \158\ Id. The estimates of registered private fund advisers are
based in part on the number of advisers that reported a fund in
Section 7.B of Schedule D to the current version of Form ADV.
Because these responses include funds advised by a related person
rather than the adviser, these data may over-estimate the total
number of private fund advisers.
    \159\ 3,500 currently registered advisers to private funds + 200
advisers to private funds registering as a result of normal growth +
750 newly registered advisers to private funds = 4,450 advisers.
    \160\ If a private fund is advised by both an adviser and one or
more subadvisers, only one of these advisers would be required to
complete Form PF. See section II.B.4 of this Release. As a result,
it is likely that some portion of these advisers either would not be
required to file Form PF or would be subject to a reporting burden
lower than is estimated for purposes of this PRA analysis. The SEC
has not attempted to adjust the burden estimates downward for this
purpose because the SEC does not currently have reliable data with
which to estimate the number of funds that have subadvisers.
    \161\ Based on the estimated total number of registered private
fund advisers that would not meet the thresholds to be considered
Large Private Fund Advisers. (4,450 estimated registered private
fund advisers -200 large hedge fund advisers -80 large liquidity
fund advisers -250 large private equity fund advisers = 3,920
smaller private fund advisers.)
---------------------------------------------------------------------------

    Smaller private fund advisers would be required to complete all or
portions of section 1 of Form PF and to file on an annual basis. As
discussed in greater detail above, section 1 would require basic data
regarding the reporting adviser's identity and certain information
about the private funds it manages, such as performance, leverage, and
investor concentration data.\162\ If the reporting adviser advises any
hedge funds, section 1 also would require basic information regarding
those funds, including their investment strategies, trading
counterparty exposures, and trading and clearing practices.
---------------------------------------------------------------------------

    \162\ See supra section II.D.1.
---------------------------------------------------------------------------

    Based on the SEC's experience with other data filings, it estimates
that smaller private fund advisers would require an average of
approximately 10 burden hours to compile, review and electronically
file the required information in section 1 of Form PF for the initial
filing and an average of approximately 3 burden hours for subsequent
filings.\163\ Accordingly, the amortized average annual burden of
periodic filings would be 5 hours per smaller private fund adviser for
each of the first three years,\164\ and the amortized aggregate annual
burden of periodic filings for smaller private fund advisers would be
19,600 hours for each of the first three years.\165\
---------------------------------------------------------------------------

    \163\ These estimates reflect the SEC's understanding that much
of the information in section 1 of Form PF is currently maintained
by most private fund advisers in the ordinary course of business. In
addition, the time required to determine a private fund adviser's
aggregate assets under management and the amount of assets under
management that relate to private funds of various types largely is
expected to be included in the approved burden associated with the
SEC's Form ADV (this information would only differ if the adviser
managed parallel managed accounts). As a result, responding to
questions on Form PF that relate to assets under management and
determining whether an adviser is a Large Private Fund Adviser
should impose little or no additional burden on private fund
advisers.
    \164\ The SEC estimates that a smaller private fund adviser
would make 3 annual filings in three years, for an amortized average
annual burden of 5 hours (1 initial filing x 10 hours + 2 subsequent
filings x 3 hours = 16 hours; and 16 hours / 3 years = approximately
5 hours). After the first three years, filers generally would not
incur the start-up burdens applicable to the first filing.
    \165\ 5 burden hours on average per year x 3,920 smaller private
fund advisers = 19,600 burden hours per year.
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B. Burden Estimates for Quarterly Reporting by Large Private Fund
Advisers

    The SEC estimates that 530 of the private fund advisers registered
with the SEC would meet one or more of the thresholds for reporting as
Large Private Fund Advisers.\166\ As discussed in section II.D above,
Large Private Fund Advisers would be required to report more
information on Form PF than smaller private fund advisers and would be
required to report on a quarterly basis. The amount of additional
information reported by a Large Private Fund Adviser would depend, in
part, on whether it is a large hedge fund adviser, a large liquidity
fund adviser, or large private equity fund adviser. A large hedge fund
adviser would be required to report more information with respect to
itself and the funds it advises than would a large liquidity fund
adviser, which in turn would report more information than a large
private equity fund adviser.\167\ Of the total number of Large Private
Fund Advisers, the SEC estimates that 200 are large hedge fund
advisers, 80 are large liquidity fund advisers, and 250 are large
private equity fund advisers.\168\
---------------------------------------------------------------------------

    \166\ See section II.B.2 of this Release for estimates of the
numbers of large hedge fund advisers, large liquidity fund advisers,
and large private equity fund advisers. (200 large hedge fund
advisers + 80 large liquidity fund advisers + 250 large private
equity fund advisers = 530 Large Private Fund Advisers.)
    \167\ See supra sections II.D.2, II.D.3 and II.D.4.
    \168\ See supra section II.B.2.
---------------------------------------------------------------------------

    Because the proposed reporting requirements on Form PF for large
hedge fund advisers would be the most extensive of the Large Private
Fund Advisers, the SEC estimates that these advisers would require, on
average, more hours than other Large Private Fund Advisers to configure
systems and to compile, review and electronically file the required
information. Accordingly, the SEC estimates that large hedge fund
advisers would require an average of approximately 75 burden hours for
an initial filing and 35 burden hours for each subsequent filing.\169\
In

contrast, large liquidity fund advisers, which would report more
information than smaller private fund advisers or large private equity
fund advisers but less information than large hedge fund advisers,
would require an average of approximately 35 burden hours for an
initial filing and 16 burden hours for each subsequent filing. Finally,
the SEC estimates that large private equity fund advisers, which would
report more information than smaller private fund advisers but less
than other Large Private Fund Advisers, would require an average of
approximately 25 burden hours for an initial filing and 12 burden hours
for each subsequent filing. Based on these estimates, the amortized
average annual burden of periodic filings would be 153 hours per large
hedge fund adviser,\170\ 70 hours per large liquidity fund
adviser,\171\ and 52 hours per large private equity fund adviser, in
each case for each of the first three years.\172\ In the aggregate, the
amortized annual burden of periodic filings would then be 30,600 hours
for large hedge fund advisers,\173\ 5,600 hours for large liquidity
fund advisers,\174\ and 13,000 hours for large private equity fund
advisers,\175\ in each case for each of the first three years.
---------------------------------------------------------------------------

    \169\ The estimates of hour burdens and costs for Large Private
Fund Advisers provided in the Paperwork Reduction Act and cost
benefit analyses are based on burden data provided by advisers in
response to the FSA hedge fund survey and on the experience of SEC
staff. These estimates also assume that some Large Private Fund
Advisers will find it efficient to automate some portion of the
reporting process, which would increase the burden of the initial
filing but reduce the burden of subsequent filings, which has been
taken into consideration in our burden estimates.
    \170\ The SEC estimates that a large hedge fund adviser would
make 12 quarterly filings in three years, for an amortized average
annual burden of 153 hours (1 initial filing x 75 hours + 11
subsequent filings x 35 hours = 460 hours; and 460 hours / 3 years =
approximately 153 hours). After the first three years, filers
generally would not incur the start-up burdens applicable to the
first filing.
    \171\ The SEC estimates that a large liquidity fund adviser
would make 12 quarterly filings in three years, for an amortized
average annual burden of 70 hours (1 initial filing x 35 hours + 11
subsequent filings x 16 hours = 211 hours; and 211 hours / 3 years =
approximately 70 hours). After the first three years, filers
generally would not incur the start-up burdens applicable to the
first filing.
    \172\ The SEC estimates that a large private equity fund adviser
would make 12 quarterly filings in three years, for an amortized
average annual burden of 52 hours (1 initial filing x 25 hours + 11
subsequent filings x 12 hours = 157 hours; and 157 hours / 3 years =
approximately 52 hours). After the first three years, filers
generally would not incur the start-up burdens applicable to the
first filing.
    \173\ 153 burden hours on average per year x 200 large hedge
fund advisers = 30,600 hours.
    \174\ 70 burden hours on average per year x 80 large liquidity
fund advisers = 5,600 hours.
    \175\ 52 burden hours on average per year x 250 large private
equity fund advisers = 13,000 hours.
---------------------------------------------------------------------------

C. Burden Estimates for Transition Filings, Final Filings and Temporary
Hardship Exemption Requests

    In addition to periodic filings, a private fund adviser would be
required to file very limited information on Form PF in three
situations.
    First, any adviser that transitions from quarterly to annual filing
because it has ceased to be a Large Private Fund Adviser would be
required to file a Form PF indicating that it is no longer obligated to
report on a quarterly basis. The SEC estimates that approximately 9
percent of Large Private Fund Advisers would need to make a transition
filing each year with a burden of 0.25 hours, or a total of 12 burden
hours per year for all private fund advisers.\176\
---------------------------------------------------------------------------

    \176\ Estimate is based on IARD data on the frequency of
advisers to one or more private funds ceasing to have assets under
management sufficient to cause them to be Large Private Fund
Advisers. (530 Large Private Fund Advisers x 0.09 x 0.25 hours = 12
hours.)
---------------------------------------------------------------------------

    Second, filers who are no longer subject to Form PF's periodic
reporting requirements would file a final report indicating that fact.
The SEC estimates that approximately 8 percent of the advisers required
to file Form PF would have to file such an amendment each year with a
burden of 0.25 of an hour, or a total of 89 burden hours per year for
all private fund advisers.\177\
---------------------------------------------------------------------------

    \177\ Estimate is based on IARD data on the frequency of
advisers to one or more private funds withdrawing from SEC
registration. (4,450 private fund advisers x 0.08 x 0.25 hours = 89
hours.)
---------------------------------------------------------------------------

    Finally, an adviser experiencing technical difficulties in
submitting Form PF may request a temporary hardship exemption by filing
portions of Form PF in paper format.\178\ The information that must be
filed is comparable to the information that Form ADV filers provide on
Form ADV-H when requesting a temporary hardship exemption relating to
that form. In the case of Form ADV-H, the SEC has estimated that the
average burden of filing is 1 hour and that approximately 1 in every
1,000 advisers will file annually.\179\ Assuming that Form PF filers
request hardship exemptions at the same rate and that the applications
impose the same burden per filing, the SEC would expect approximately 4
filers to request a temporary hardship exemption each year \180\ for a
total of 4 burden hours.\181\
---------------------------------------------------------------------------

    \178\ See proposed SEC rule 204(b)-1(f). The proposed rule would
require that the adviser complete and file Item A of Section 1a and
Section 5 of Form PF, checking the box in Section 1a indicating that
the filing is a request for a temporary hardship exemption.
    \179\ See section V.F of the Implementing Release.
    \180\ 4,450 private fund advisers x 1 request per 1,000 advisers
= approximately 4 advisers.
    \181\ 4 advisers x 1 hour per response = 4 hours.
---------------------------------------------------------------------------

D. Aggregate Burden Estimates

    Based on the foregoing, the SEC estimates that Form PF would result
in an aggregate of 68,905 burden hours per year for all private fund
advisers for each of the first three years, or 15 burden hours per year
on average for each private fund adviser over the same period.\182\
---------------------------------------------------------------------------

    \182\ 19,600 hours for periodic filings by smaller advisers +
30,600 hours for periodic filings by large hedge fund advisers +
5,600 hours for periodic filings by large liquidity fund advisers +
13,000 hours for periodic filings by large private equity fund
advisers + 12 hours per year for transition filings + 89 hours per
year for final filings + 4 hours per year for temporary hardship
requests = approximately 68,905 hours per year. 68,905 hours per
year / 4,450 total advisers = 15 hours per year on average.
---------------------------------------------------------------------------

E. Request for Comment

    Pursuant to 44 U.S.C. 3506(c)(2)(B), the SEC solicits comments to:
(i) Evaluate whether the proposed amendments to the collection of
information are necessary for the proper performance of the functions
of the SEC, including whether the information would have practical
utility; (ii) evaluate the accuracy of the SEC's estimate of the burden
of the proposed collection of information; (iii) determine whether
there are ways to enhance the quality, utility, and clarity of the
information to be collected; and (iv) determine whether there are ways
to minimize the burden of the collection of information on those who
are to respond, including through the use of automated collection
techniques or other forms of information technology. In particular,
would private fund advisers seek to automate all or part of their Form
PF reporting obligations? Would automation be efficient only for Large
Private Fund Advisers, or would smaller private fund advisers also be
able to automate efficiently? What is the likely burden of automation?
Would advisers use internal personnel or pay outside service providers
to make needed system modifications or to perform all or part of their
Form PF reporting obligations? If outside service providers are used,
what is the likely cost and how would it impact our estimates of
internal costs and hourly burdens for the proposed reporting?
    Persons desiring to submit comments on the collection of
information requirements should direct them to the Office of Management
and Budget, Attention: Desk Officer for the Securities and Exchange
Commission, Office of Information and Regulatory Affairs, Room 10102,
New Executive Office Building, Washington, DC 20503, and also should
send a copy of their comments to Elizabeth M. Murphy, Secretary,
Securities and Exchange Commission, 100 F Street, NE., Washington, DC
20549-1090 with reference to File No. S7-05-11. Requests for materials
submitted to OMB by the Commission with regard to this collection of
information should be

in writing, refer to File No. S7-05-11, and be submitted to the
Securities and Exchange Commission, Office of Investor Education and
Advocacy, 100 F Street, NE., Washington, DC 20549-0213. OMB is required
to make a decision concerning the collections of information between 30
and 60 days after publication of this Release. Therefore, a comment to
OMB is best assured of having its full effect if OMB receives it within
30 days after publication of this Release.

V. CFTC Cost-Benefit Analysis

    Section 15(a) of the CEA \183\ requires the CFTC to consider the
costs and benefits of its actions before issuing rules, regulations, or
orders under the CEA. By its terms, section 15(a) does not require the
CFTC to quantify the costs and benefits of its rules, regulations or
orders or to determine whether the benefits outweigh the costs. Rather,
section 15(a) requires that the CFTC ``consider'' the costs and
benefits of its actions. Section 15(a) further specifies that the costs
and benefits shall be evaluated in light of the following five broad
areas of concern: (1) Protection of market participants and the public;
(2) efficiency, competitiveness and financial integrity of futures
markets; (3) price discovery; (4) sound risk management practices; and
(5) other public interest considerations. The CFTC may in its
discretion give greater weight to any one of the five enumerated areas
and could in its discretion determine that, notwithstanding the costs,
a particular rule, regulation, or order is necessary or appropriate to
protect the public interest or to effectuate any of the provisions or
accomplish any of the purposes of the CEA.
---------------------------------------------------------------------------

    \183\ See 5 U.S.C. 801(a)(1)(B)(i).
---------------------------------------------------------------------------

    The proposed rule 4.27(d) would deem a CPO registered with the CFTC
that is dually registered as a private fund adviser with the SEC to
have satisfied its filing requirements for Schedules B and C of
proposed Form CPO-PQR by completing and filing the applicable portions
of Form PF for each of its commodity pools that satisfy the definition
of ``private fund'' in the Dodd-Frank Act. Under the proposed rule,
most of the CPOs and CTAs that are dually registered as private fund
advisers would be required to provide annually a limited amount of
basic information on Form PF about the operations of their private
funds. Only large CPOs and CTAs that are also registered as private
fund advisers with the SEC would have to submit on a quarterly basis
the full complement of systemic risk related information required by
Form PF.
    As noted above, the Dodd-Frank Act tasks FSOC with monitoring the
financial services marketplace in order to identify potential threats
to the financial stability of the United States.\184\ The Dodd-Frank
Act also requires FSOC to collect information from member agencies to
support its functions.\185\ The CFTC and the SEC are jointly proposing
sections 1 and 2 of Form PF as a means to collect the information
necessary to permit FSOC to fulfill its obligation to monitor private
funds, and in order to identify any potential systemic threats arising
from their activities. The CFTC and the SEC do not currently collect
the information that is covered in proposed sections 1 and 2 of Form
PF.
---------------------------------------------------------------------------

    \184\ See section 112(a)(2)(C) of the Dodd-Frank Act.
    \185\ See section 112(d)(1) of the Dodd-Frank Act.
---------------------------------------------------------------------------

    With respect to costs, the CFTC has determined that: (1) Without
the proposed reporting requirements imposed on dually-registered CPOs
and CTAs, FSOC will not have sufficient information to identify and
address potential threats to the financial stability of the United
States (such as the near collapse of Long Term Capital Management); (2)
the proposed reporting requirements, once finalized, will provide the
CFTC with better information regarding the business operations,
creditworthiness, use of leverage, and other material information of
certain registered CPOs and CTAs that are also registered as investment
advisers with the SEC; and (3) while they are necessary to U.S.
financial stability, the proposed reporting requirements will create
additional compliance costs for these registrants.
    The CFTC has determined that the proposed reporting requirements
will provide a benefit to all investors and market participants by
providing the CFTC and other policy makers with more complete
information about these registrants and the potential risk their
activities may pose to the U.S. financial system. In turn, this
information would enhance the CFTC's ability to appropriately tailor
its regulatory policies to the commodity pool industry and its
operators and advisors. As mentioned above, the CFTC and the SEC do not
have access to this information today and have instead been made to use
information from other, less reliable sources.
    The CFTC invites public comment on its cost-benefit considerations
as concerns sections 1 and 2 of Form PF. Commenters are also invited to
submit any data and other information that they may have quantifying or
qualifying the perceived costs and benefits of this proposed rule with
their comment letters.

VI. SEC Economic Analysis

    As discussed above, the Dodd-Frank Act amended the Advisers Act to,
among other things, authorize and direct the SEC to promulgate
reporting requirements for private fund advisers. In enacting Sections
404 and 406 of the Dodd-Frank Act, Congress determined to require that
private fund advisers file reports with the SEC and specified certain
types of information that should be subject to reporting and/or
recordkeeping requirements, but Congress left to the SEC the
determination of the specific information to be maintained or reported.
When determining the form and content of such reports, the SEC may
require that private fund advisers file such information ``as necessary
and appropriate in the public interest and for the protection of
investors'' or for the assessment of system risk.
    The SEC is proposing rule 204(b)-1 and Form PF, to implement the
private fund adviser reporting requirements that the Dodd-Frank Act
contemplates. Under the proposed rule, private fund advisers would be
required to file information responsive to all or portions of Form PF
on a periodic basis. The scope of the required information and the
frequency of the reporting would be related to the amount of private
fund assets that each private fund adviser manages and the type of
private fund to which those assets relate. Specifically, smaller
private fund advisers would be required to report annually and provide
only basic information regarding their operations and the private funds
they advise, while Large Private Fund Advisers would report on a
quarterly basis and provide more information.\186\
---------------------------------------------------------------------------

    \186\ See section II.B of this Release for a description of who
would be required to file Form PF, section II.C of this Release for
information regarding the frequency with which private fund advisers
would be required to file Form PF, and section II.D of this Release
for a description of the information that private fund advisers
would be required to report on Form PF. See also proposed
Instruction 8 to Form PF for information regarding the frequency
with which private fund advisers would be required to file Form PF.
---------------------------------------------------------------------------

    The SEC is sensitive to the costs and benefits imposed by its
rules. It has identified certain costs and benefits of proposed
Advisers Act rule 204(b)-1 and Form PF, and it requests comment on all
aspects of the cost-benefit analysis below, including identification
and assessment of any costs and benefits not discussed in this
analysis. In

connection with its consideration of the costs and benefits, the SEC
also has considered whether the proposal would promote efficiency,
competition, and capital formation. Section 202(c) of the Advisers Act
requires the SEC, when engaging in rulemaking that requires it to
consider or determine whether an action is necessary or appropriate in
the public interest, to consider, in addition to the protection of
investors, whether the action will promote efficiency, competition, and
capital formation.\187\
---------------------------------------------------------------------------

    \187\ 15 U.S.C. 80b-2(c).
---------------------------------------------------------------------------

    The SEC seeks comment and data on the value of the benefits
identified. It also welcomes comments on the accuracy of the cost
estimates in this analysis, and requests that commenters provide data
that may be relevant to these cost estimates. In addition, the SEC
seeks estimates and views regarding these costs and benefits for
particular covered advisers, including small advisers, as well as any
other costs or benefits that may result from the adoption of the
proposed rule and form.
    Because proposed Advisers Act rule 204(b)-1 and Form PF would
implement sections 404 and 406 of the Dodd-Frank Act, the benefits and
costs considered by Congress in passing the Dodd-Frank Act are not
entirely separable from the benefits and costs imposed by the SEC in
designing the proposed rule and form. Accordingly, although the PRA
hourly burden estimates discussed above, and their corresponding dollar
cost estimates, are included in full below and in the PRA analysis
above, a portion of the reporting costs is attributable to the
requirements of the Dodd-Frank Act and not specific requirements of the
proposed rule or form.

A. Benefits

    The SEC believes Form PF may create two principal classes of
benefits. First, the information collected through Form PF is expected
to facilitate FSOC's monitoring of the systemic risks that private
funds may pose and to assist FSOC in carrying out its other duties
under the Dodd-Frank Act with respect to nonbank financial companies.
Second, this information may enhance the ability of the SEC to evaluate
and form regulatory policies and improve the efficiency and
effectiveness of the SEC's monitoring of markets for investor
protection and market vitality.
    The Dodd-Frank Act directs FSOC to monitor emerging risks to U.S.
financial stability \188\ and to require FRB supervision of designated
nonbank financial companies that may pose risks to U.S. financial
stability in the event of their material financial distress or failure
or because of their activities.\189\ In addition, the Dodd-Frank Act
directs FSOC to recommend to the FRB heightened prudential standards
for designated nonbank financial companies.\190\
---------------------------------------------------------------------------

    \188\ See supra note 6 and accompanying text.
    \189\ Section 112(a)(2) of the Dodd-Frank Act.
    \190\ See supra note 7 and accompanying text.
---------------------------------------------------------------------------

    In enacting Sections 404 and 406 of the Dodd-Frank Act, Congress
recognized that FSOC would need information from private fund advisers
to help it carry out its duties. As a result, proposed Form PF is
designed to gather information regarding the private fund industry that
would be useful to FSOC in monitoring systemic risk.\191\ Systemic risk
may arise from a variety of sources, including interconnectedness,
changes in market liquidity and market concentrations, and so the
information that Form PF elicits is intended to provide data that,
individually or in the aggregate, would permit FSOC to identify where
systemic risk may arise across a range of sources. The SEC expects that
FSOC would use this data to supplement the data that it collects
regarding other financial market participants and gain a broader view
of the financial system than is currently available to regulators. In
this manner, the SEC believes that the information collected through
Form PF could play an important role in FSOC's monitoring of systemic
risk, both in the private fund industry and in the financial markets
more broadly.
---------------------------------------------------------------------------

    \191\ See section II.D of this Release for a description of the
information that private fund advisers would be required to report
on proposed Form PF.
---------------------------------------------------------------------------

    The proposed private fund reporting on Form PF would also benefit
all investors and market participants by improving the information
available to the SEC regarding the private fund industry. Today,
regulators have little reliable data regarding this rapidly growing
sector and frequently have to rely on data from other sources, which
when available may be incomplete. As discussed above, the more reliable
data collected through Form PF would assist FSOC in identifying and
addressing risks to U.S. financial stability, potentially protecting
investors and other market participants from significant losses. In
addition, this data would provide the SEC with a more complete view of
the financial markets in general and the private fund industry in
particular. This broader perspective and more reliable data may enhance
its ability to form and frame regulatory policies regarding the private
fund industry and its advisers, and to more effectively evaluate the
outcomes of regulatory policies and programs directed at this sector,
including for the protection of private fund investors.
    The SEC also estimates that the proposed rule may improve the
efficiency and effectiveness of the SEC's oversight of private fund
advisers by enabling SEC staff to manage and analyze information
related to the risks posed by private funds more quickly, more
effectively, and at a lower cost than is currently possible. This would
allow the SEC to more efficiently and effectively target its
examination program. The SEC would be able to use Form PF information
to generate reports on the industry, its characteristics and trends.
These reports may help the SEC anticipate regulatory problems, allocate
and reallocate its resources, and more fully evaluate and anticipate
the implications of various regulatory actions it may consider taking,
which should increase both the efficiency and effectiveness of its
programs and thus increase investor protection. Responses to many of
the proposed questions would help the SEC better understand the
investment activities of private funds and the scope of their potential
effect on investors and the markets that the SEC regulates.
    The coordination with the CFTC would also result in significant
efficiencies for private fund advisers that are also registered as a
CPO or CTA with the CFTC because, under the proposed rules in this
Release, these advisers would satisfy certain reporting obligations
under both proposed Advisers Act rule 204(b)-1 and proposed CEA rule
4.27(d) with respect to commodity pools that satisfy the definition of
``private fund'' (as proposed in Form PF) by filing Form PF. As
discussed in section I.B of this Release, the SEC also has coordinated
with foreign financial regulators regarding the reporting of systemic
risk information regarding hedge funds and anticipates that this
coordination, as reflected in proposed Form PF, would result in greater
efficiencies in reporting by private fund advisers, as well as
information sharing and private fund monitoring among foreign financial
regulators.
    As discussed in section II.B of this Release, the SEC has designed
the reporting frequency in proposed Form PF based on when it
understands advisers to private funds are already compiling certain
information that Form PF would require, creating efficiencies for, and
benefiting, the adviser in satisfying its reporting obligations. The
SEC also has based certain more specific

reporting items on information that it understands large hedge fund
advisers frequently calculate for purposes of reporting to investors in
the funds.\192\
---------------------------------------------------------------------------

    \192\ See note 105 and accompanying text.
---------------------------------------------------------------------------

    The SEC does not expect that this proposal would have an effect on
competition because the information generally would be non-public and
similar types of advisers would have comparable burdens under the form.
The SEC also does not expect that this proposal would have an effect on
capital formation because the information generally would be non-public
and thus should not impact private fund advisers' ability to raise
capital or their market activities.

B. Costs

    The proposed reporting requirement also would impose certain costs
on private fund advisers. In order to minimize these costs, the scope
of the required information and the frequency of the reporting
generally would be less for private fund advisers that manage less
private fund assets or that do not manage types of private funds that
may be more likely to pose systemic risk. Specifically, smaller private
fund advisers would be required to report annually and provide only
basic information regarding their operations and the private funds they
advise, while Large Private Fund Advisers would report on a quarterly
basis and provide more information.\193\ Further, the additional
information required from large hedge fund advisers would be more
extensive than the additional information required from large liquidity
fund advisers, which in turn would be more extensive than that required
from large private equity fund advisers.
---------------------------------------------------------------------------

    \193\ See section II.B of this Release for a description of who
would be required to file Form PF, section II.C of this Release for
information regarding the frequency with which private fund advisers
would be required to file Form PF, and section II.D of this Release
for a description of the information that private fund advisers
would be required to report on Form PF. See also proposed
Instruction 8 to Form PF for information regarding the frequency
with which private fund advisers would be required to file Form PF.
---------------------------------------------------------------------------

    The SEC expects that the costs of reporting would be most
significant for the first report that a private fund adviser is
required to file because the adviser would need to familiarize itself
with the new reporting form and may need to configure its systems in
order to efficiently gather the required information. The SEC also
anticipates that the initial report would require more attention from
senior personnel, including compliance managers and senior risk
management specialists, than would subsequent reports. In addition, the
SEC expects that some Large Private Fund Advisers would find it
efficient to automate some portion of the reporting process, which
would increase the burden of the initial filing but reduce the burden
of subsequent filings.
    In subsequent reporting periods, the SEC anticipates that filers
would incur significantly lower costs because much of the work involved
in the initial report is non-recurring and because of efficiencies
realized from system configuration and reporting automation efforts
accounted for in the initial reporting period. In addition, the SEC
estimates that senior personnel would bear less of the reporting burden
in subsequent reporting periods, reducing costs though not necessarily
reducing the burden hours.
    Based on the foregoing, the SEC estimates \194\ that, for the
purposes of the PRA, the periodic filing requirements under Form PF
(including configuring systems and compiling, automating, reviewing and
electronically filing the report) would impose:
---------------------------------------------------------------------------

    \194\ The SEC understands that some advisers may outsource all
or a portion of their Form PF reporting responsibilities to a filing
agent, software consultant, or other third-party service provider.
The SEC believes, however, that an adviser would engage third-party
service providers only if the external costs were comparable, or
less than, the estimated internal costs of compiling, reviewing, and
filing the Form PF. The hourly wage data used in this Economic
Analysis section of the Release is based on the Securities Industry
and Financial Markets Association's Report on Management &
Professional Earnings in the Securities Industry 2010. This data has
been modified to account for an 1,800-hour work-year and multiplied
by 5.35 for management and professional employees and by 2.93 for
general and compliance clerks to account for bonuses, firm size,
employee benefits and overhead.
---------------------------------------------------------------------------

    (1) 10 burden hours at a cost of $3,410 \195\ per smaller private
fund adviser for the initial annual report;
---------------------------------------------------------------------------

    \195\ The SEC expects that for the initial report these
activities will most likely be performed equally by a compliance
manager at a cost of $273 per hour and a senior risk management
specialist at a cost of $409 per hour and that, because of the
limited scope of information required from smaller private fund
advisers, these advisers generally would not realize significant
benefits from or incur significant costs for system configuration or
automation. ($273/hour x 0.5 + $409/hour x 0.5) x 10 hours =
approximately $3,410.
---------------------------------------------------------------------------

    (2) 3 burden hours at a cost of $830 \196\ per smaller private fund
adviser for each subsequent annual report;
---------------------------------------------------------------------------

    \196\ The SEC expects that for subsequent reports senior
personnel will bear less of the reporting burden. As a result, the
SEC estimates that these activities will most likely be performed
equally by a compliance manager at a cost of $273 per hour, a senior
compliance examiner at a cost of $235 per hour, a senior risk
management specialist at a cost of $409 per hour and a risk
management specialist at a cost of $192 per hour. ($273/hour x 0.25
+ $235/hour x 0.25 + $409/hour x 0.25 + $192/hour x 0.25) x 3 hours
= approximately $830.
---------------------------------------------------------------------------

    (3) 75 burden hours at a cost of $23,270 \197\ per large hedge fund
adviser for the initial quarterly report;
---------------------------------------------------------------------------

    \197\ The SEC expects that for the initial report, of a total
estimated burden of 75 hours, approximately 45 hours will most
likely be performed by compliance professionals and 30 hours will
most likely be performed by programmers working on system
configuration and reporting automation. Of the work performed by
compliance professionals, the SEC anticipates that it will be
performed equally by a compliance manager at a cost of $273 per hour
and a senior risk management specialist at a cost of $409 per hour.
Of the work performed by programmers, the SEC anticipates that it
will be performed equally by a senior programmer at a cost of $304
per hour and a programmer analyst at a cost of $224 per hour. ($273/
hour x 0.5 + $409/hour x 0.5) x 45 hours + ($304/hour x 0.5 + $224/
hour x 0.5) x 30 hours = approximately $23,270.
---------------------------------------------------------------------------

    (4) 35 burden hours at a cost of $9,700 \198\ per large hedge fund
adviser for each subsequent quarterly report;
---------------------------------------------------------------------------

    \198\ The SEC expects that for subsequent reports senior
personnel will bear less of the reporting burden and that
significant system configuration and reporting automation costs will
not be incurred. As a result, the SEC estimates that these
activities will most likely be performed equally by a compliance
manager at a cost of $273 per hour, a senior compliance examiner at
a cost of $235 per hour, a senior risk management specialist at a
cost of $409 per hour and a risk management specialist at a cost of
$192 per hour. ($273/hour x 0.25 + $235/hour x 0.25 + $409/hour x
0.25 + $192/hour x 0.25) x 35 hours = approximately $9,700.
---------------------------------------------------------------------------

    (5) 35 burden hours at a cost of $10,860 \199\ per large liquidity
fund adviser for the initial quarterly report;
---------------------------------------------------------------------------

    \199\ The SEC expects that for the initial report, of a total
estimated burden of 35 hours, approximately 21 hours will most
likely be performed by compliance professionals and 14 hours will
most likely be performed by programmers working on system
configuration and reporting automation. Of the work performed by
compliance professionals, the SEC anticipates that it will be
performed equally by a compliance manager at a cost of $273 per hour
and a senior risk management specialist at a cost of $409 per hour.
Of the work performed by programmers, the SEC anticipates that it
will be performed equally by a senior programmer at a cost of $304
per hour and a programmer analyst at a cost of $224 per hour. ($273/
hour x 0.5 + $409/hour x 0.5) x 21 hours + ($304/hour x 0.5 + $224/
hour x 0.5) x 14 hours = approximately $10,860.
---------------------------------------------------------------------------

    (6) 16 burden hours at a cost of $4,440 \200\ per large liquidity
fund adviser for each subsequent quarterly report;
---------------------------------------------------------------------------

    \200\ The SEC expects that for subsequent reports senior
personnel will bear less of the reporting burden and that
significant system configuration and reporting automation costs will
not be incurred. As a result, the SEC estimates that these
activities will most likely be performed equally by a compliance
manager at a cost of $273 per hour, a senior compliance examiner at
a cost of $235 per hour, a senior risk management specialist at a
cost of $409 per hour and a risk management specialist at a cost of
$192 per hour. ($273/hour x 0.25 + $235/hour x 0.25 + $409/hour x
0.25 + $192/hour x 0.25) x 16 hours = approximately $4,440.
---------------------------------------------------------------------------

    (7) 25 burden hours at a cost of $7,760 \201\ per large private
equity fund

adviser for the initial quarterly report; and
---------------------------------------------------------------------------

    \201\ The SEC expects that for the initial report, of a total
estimated burden of 25 hours, approximately 15 hours will most
likely be performed by compliance professionals and 10 hours will
most likely be performed by programmers working on system
configuration and reporting automation. Of the work performed by
compliance professionals, the SEC anticipates that it will be
performed equally by a compliance manager at a cost of $273 per hour
and a senior risk management specialist at a cost of $409 per hour.
Of the work performed by programmers, the SEC anticipates that it
will be performed equally by a senior programmer at a cost of $304
per hour and a programmer analyst at a cost of $224 per hour. ($273/
hour x 0.5 + $409/hour x 0.5) x 15 hours + ($304/hour x 0.5 + $224/
hour x 0.5) x 10 hours = approximately $7,760.
---------------------------------------------------------------------------

    (8) 12 burden hours at a cost of $3,330 \202\ per large private
equity fund adviser for each subsequent quarterly report.

    \202\ The SEC expects that for subsequent reports senior
personnel will bear less of the reporting burden and that
significant system configuration and reporting automation costs will
not be incurred. As a result, the SEC estimates that these
activities will most likely be performed equally by a compliance
manager at a cost of $273 per hour, a senior compliance examiner at
a cost of $235 per hour, a senior risk management specialist at a
cost of $409 per hour and a risk management specialist at a cost of
$192 per hour. ($273/hour x 0.25 + $235/hour x 0.25 + $409/hour x
0.25 + $192/hour x 0.25) x 12 hours = approximately $3,330.
---------------------------------------------------------------------------

Assuming that there are 3,920 smaller private fund advisers, 200 large
hedge fund advisers, 80 large liquidity fund advisers, and 250 large
private equity fund advisers, the foregoing estimates would suggest an
annual cost of $30,200,000 \203\ for all private fund advisers in the
first year of reporting and an annual cost of $15,800,000 in subsequent
years.\204\
---------------------------------------------------------------------------

    \203\ (3,920 smaller private fund advisers x $3,410 per initial
annual report) + (200 large hedge fund advisers x $23,270 per
initial quarterly report) + (200 large hedge fund advisers x 3
quarterly reports x $9,700 per subsequent quarterly report) + (80
large liquidity fund advisers x $10,860 per initial quarterly
report) + (80 large liquidity fund advisers x 3 quarterly reports x
$4,440 per subsequent quarterly report) + (250 large private equity
fund advisers x $7,760 per initial quarterly report) + (250 large
private equity fund advisers x 3 quarterly reports x $3,330 per
subsequent quarterly report) = approximately $30,200,000.
    \204\ (3,920 smaller private fund advisers x $830 per subsequent
annual report) + (200 large hedge fund advisers x 4 quarterly
reports x $9,700 per subsequent quarterly report) + (80 large
liquidity fund advisers x 4 quarterly reports x $4,440 per
subsequent quarterly report) + (250 large private equity fund
advisers x 4 quarterly reports x $3,330 per subsequent quarterly
report) = approximately $15,800,000.
---------------------------------------------------------------------------

    In addition, as discussed above, a private fund adviser would be
required to file very limited information on Form PF if it needed to
transition from quarterly to annual filing, if it were no longer
subject to the reporting requirements of Form PF or if it required a
temporary hardship exemption under proposed rule 204(b)-1(f). The SEC
estimates that transition and final filings would, collectively, cost
private fund advisers as a whole approximately $6,770 per year.\205\
The SEC further estimates that hardship exemption requests would cost
private fund advisers as a whole approximately $760 per year.\206\
---------------------------------------------------------------------------

    \205\ The SEC estimates that, for the purposes of the PRA,
transition filings will impose 12 burden hours per year on private
fund advisers in the aggregate and that final filings will impose 89
burden hours per year on private fund advisers in the aggregate. The
SEC anticipates that this work will most likely be performed by a
compliance clerk at a cost of $67 per hour. (12 burden hours + 89
burden hours) x $67/hour = approximately $6,770.
    \206\ The SEC estimates that, for the purposes of the PRA,
requests for temporary hardship exemptions will impose 4 burden
hours per year on private fund advisers in the aggregate. The SEC
anticipants that five-eighths of this work will most likely be
performed by a compliance manager at a cost of $273 per hour and
that three-eighths of this work will most likely be performed by a
general clerk at a cost of $50 per hour. (($273 per hour x \5/8\ of
an hour) + ($50 per hour x \3/8\ of an hour)) x 4 hours =
approximately $760.
---------------------------------------------------------------------------

    Finally, firms required to file Form PF would have to pay filing
fees. The amount of these fees has not yet been determined.\207\
---------------------------------------------------------------------------

    \207\ See supra note 147 and accompanying text.
---------------------------------------------------------------------------

C. Request for Comment

    The SEC requests comments on all aspects of the foregoing cost-
benefit analysis, including the accuracy of the potential costs and
benefits identified and assessed in this Release, as well as any other
costs or benefits that may result from the proposals. The SEC
encourages commenters to identify, discuss, analyze, and supply
relevant data regarding these or additional costs and benefits. The SEC
also requests comment on the foregoing analysis of the likely effect of
the proposed rule on competition, efficiency, and capital formation.
Commenters are requested to provide empirical data to support their
views.
    In addition, for purposes of the Small Business Regulatory
Enforcement Fairness Act of 1996, or ``SBREFA,'' \208\ the SEC must
advise OMB whether a proposed regulation constitutes a ``major'' rule.
Under SBREFA, a rule is considered ``major'' where, if adopted, it
results in or is likely to result in: (1) An annual effect on the
economy of $100 million or more; (2) a major increase in costs or
prices for consumers or individual industries; or (3) significant
adverse effects on competition, investment, or innovation.
---------------------------------------------------------------------------

    \208\ Public Law 104-121, Title II, 110 Stat. 857 (1996)
(codified in various sections of 5 U.S.C., 15 U.S.C. and as a note
to 5 U.S.C. 601).
---------------------------------------------------------------------------

    We request comment on the potential impact of the proposed new rule
and proposed rule amendments on the economy on an annual basis.
Commenters are requested to provide empirical data and other factual
support for their views to the extent possible.

VII. Initial Regulatory Flexibility Analysis

CFTC

    Under proposed rule 4.27(d), the CFTC would not impose any
additional burden upon registered CPOs and CTAs that are dually
registered as investment advisers with the SEC because such entities
are only required to file Form PF with the SEC. Further, certain CPOs
registered with the CFTC that are also registered with the SEC would be
deemed to have satisfied certain CFTC-related filing requirements by
completing and filing the applicable sections of Form PF with the SEC.
Therefore, any burden imposed by Form PF through proposed rule 4.27(d)
on small entities registered with both the CFTC and the SEC has been
accounted for within the SEC's initial calculations regarding the
impact of this collection of information under the Regulatory
Flexibility Act (``RFA'').\209\ Accordingly, the Chairman, on behalf of
the CFTC, hereby certifies pursuant to 5 U.S.C. 605(b) that the
proposed rules will not have a significant impact on a substantial
number of small entities.
---------------------------------------------------------------------------

    \209\ 5 U.S.C. 603(a).
---------------------------------------------------------------------------

SEC

    The SEC has prepared the following Initial Regulatory Flexibility
Analysis (``IRFA'') regarding proposed Advisers Act rule 204(b)-1 in
accordance with section 3(a) of the RFA.

A. Reasons for Proposed Action

    The SEC is proposing rule 204(b)-1 and Form PF specifying
information that private fund advisers must disclose confidentially to
the SEC, which information the SEC will share with FSOC for systemic
risk assessment purposes to help implement sections 404 and 406 of the
Dodd-Frank Act. Under the proposed rule, private fund advisers would be
required to file information responsive to all or portions of Form PF
on a periodic basis. The scope of the required information and the
frequency of the reporting would be related to the amount of private
fund assets that each private fund adviser manages and the type of
private fund to which those assets relate. Specifically, smaller
private fund advisers would be required to report annually and provide
only basic information regarding their operations and the private funds
they advise, while Large Private Fund

Advisers would report on a quarterly basis and provide more
information.\210\
---------------------------------------------------------------------------

    \210\ See section II.B of this Release for a description of who
would be required to file Form PF, section II.C of this Release for
information regarding the frequency with which private fund advisers
would be required to file Form PF, and section II.D of this Release
for a description of the information that private fund advisers
would be required to report on Form PF. See also proposed
Instruction 8 to Form PF for information regarding the frequency
with which private fund advisers would be required to file Form PF.
---------------------------------------------------------------------------

B. Objectives and Legal Basis

    As described more fully in sections I and II of this Release, the
general objective of proposed Advisers Act rule 204(b)-1 is to assist
FSOC in its obligations under the Dodd-Frank Act relating to nonbank
financial companies and in monitoring systemic risk. The SEC is
proposing rule 204(b)-1 and Form PF pursuant to the SEC's authority set
forth in sections 404 and 406 of the Dodd-Frank Act, to be codified at
sections 204(b) and 211(e) of the Advisers Act [15 U.S.C. 80b-4(b) and
80b-11(e)].

C. Small Entities Subject to the Rule

    Under SEC rules, for the purposes of the Advisers Act and the
Regulatory Flexibility Act, an investment adviser generally is a small
entity if it: (i) Has assets under management having a total value of
less than $25 million; (ii) did not have total assets of $5 million or
more on the last day of its most recent fiscal year; and (iii) 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.\211\
---------------------------------------------------------------------------

    \211\ 17 CFR 275.0-7(a).
---------------------------------------------------------------------------

    Under section 203A of the Advisers Act, most advisers qualifying as
small entities are prohibited from registering with the SEC and are
instead registered with State regulators. Therefore, few small advisers
would be subject to the proposed rule and form. The SEC estimates that
as of December 1, 2010, approximately 50 advisers that were small
entities were registered with the SEC and advised one or more private
funds.\212\
---------------------------------------------------------------------------

    \212\ Based on IARD data.
---------------------------------------------------------------------------

D. Reporting, Recordkeeping, and Other Compliance Requirements

    The proposed rule and form would impose certain reporting and
compliance requirements on advisers, including small advisers. The
proposed rule would require all small advisers registered with the SEC
and that advise one or more private funds to file Form PF, completing
all or part of section 1 of that form. As discussed above, the SEC
estimates that completing, reviewing, and filing Form PF would cost
$3,410 per year for each small adviser in its first year of reporting
and $830 per year for each subsequent year.\213\ In addition, small
entities would be required to pay a filing fee when submitting Form PF.
The amount of the filing fee has not yet been determined, but we
anticipate that Large Private Fund Advisers' filing fees would be set
at a higher amount than small advisers.
---------------------------------------------------------------------------

    \213\ See supra notes 195-196 and accompanying text.
---------------------------------------------------------------------------

E. Duplicative, Overlapping, or Conflicting Federal Rules

    The SEC has not identified any Federal rules that duplicate or
overlap or conflict with the proposed rule.

F. Significant Alternatives

    The Regulatory Flexibility Act directs the SEC to consider
significant alternatives that would accomplish the stated objective,
while minimizing any significant impact on small entities. In
connection with the proposed rules and amendments, the SEC considered
the following alternatives: (i) The establishment of differing
compliance or reporting requirements or timetables that take into
account the resources available to small entities; (ii) the
clarification, consolidation, or simplification of compliance and
reporting requirements under the rule for small entities; (iii) the use
of performance rather than design standards; and (iv) an exemption from
coverage of the rule, or any part thereof, for small entities.
    Regarding the first and fourth alternatives, the SEC has proposed
different reporting requirements and timetables for small entities. The
proposed rule only would require small entity advisers to file Form PF
annually and to complete applicable portions of section 1 of the
form.\214\ These smaller advisers also would have to pay a smaller
amount of filing fees than Large Private Fund Advisers. Regarding the
second alternative, the information that would be required of small
entities under section 1 of Form PF is quite simplified from the more
extensive reporting that would be required of Large Private Fund
Advisers and is consolidated in one section of the form.
---------------------------------------------------------------------------

    \214\ If the adviser had no hedge fund assets under management,
it would not need to complete section 1.C of the proposed form.
Advisers that manage both registered money market funds and
liquidity funds would be required to complete section 3 of Form PF,
but there are no small entities that manage a registered money
market fund. See section II.B of this Release for a description of
who would be required to file Form PF, section II.C of this Release
for information regarding the frequency with which smaller private
fund advisers would be required to file Form PF, and section II.D.1
of this Release for a description of the information that smaller
private fund advisers would be required to report on Form PF. See
also proposed Instruction 8 to Form PF for information regarding the
frequency with which smaller private fund advisers would be required
to file Form PF.
---------------------------------------------------------------------------

G. Solicitation of Comments

    The SEC encourages written comments on matters discussed in this
IRFA. In particular, the SEC seeks comment on:
     The number of small entities that would be subject to the
proposed rule; and
     Whether the effect of the proposed rule on small entities
would be economically significant.
    Commenters are asked to describe the nature of any effect and
provide empirical data supporting the extent of the effect.

VIII. Statutory Authority

CFTC

    The CFTC is proposing rule 4.27(d) [17 CFR 4.27(d)] pursuant to its
authority set forth in section 4n of the Commodity Exchange Act [7
U.S.C. 6n].

SEC

    The SEC is proposing rule 204(b)-1 [17 CFR 275.204(b)-1] pursuant
to its authority set forth in sections 404 and 406 of the Dodd-Frank
Act, to be codified at sections 204(b) and 211(e) of the Advisers Act
[15 U.S.C. 80b-4 and 15 U.S.C. 80b-11], respectively.
    The SEC is proposing rule 279.9 pursuant to its authority set forth
in sections 404 and 406 of the Dodd-Frank Act, to be codified at
sections 204(b) and 211(e) of the Advisers Act [15 U.S.C. 80b-4 and 15
U.S.C. 80b-11], respectively.

List of Subjects

17 CFR Part 4

    Advertising, Brokers, Commodity Futures, Commodity pool operators,
Commodity trading advisors, Consumer protection, Reporting and
recordkeeping requirements.

17 CFR Part 275

    Reporting and recordkeeping requirements, Securities.

Text of Proposed Rules

Commodity Futures Trading Commission

    For the reasons set out in the preamble, the CFTC is proposing to
amend Title 17, Chapter I of the Code of Federal Regulations as
follows:

PART 4--COMMODITY POOL OPERATORS AND COMMODITY TRADING ADVISORS

    1. The authority citation for part 4 continues to read as follows:

    Authority:  7 U.S.C. 1a, 2, 4, 6(c), 6b, 6c, 6l, 6m, 6n, 6o,
12a, and 23.
* * * * *
    2. In Sec.  4.27, as proposed to be added elsewhere in this issue
of the Federal Register, add paragraph (d) to read as follows:

Sec.  4.27  Additional reporting by advisors of commodity pools.

* * * * *
    (d) Investment advisers to private funds. CPOs and CTAs who are
dually registered with the Securities and Exchange Commission and
advise one or more private funds, as defined in section 202 of the
Investment Advisers Act of 1940 (15 U.S.C. 80b-2(a)), shall file Form
PF with the Securities and Exchange Commission. Dually registered CPOs
and CTAs that file Form PF with the Securities and Exchange Commission
will be deemed to have filed Form PF with the Commission for purposes
of any enforcement action regarding any false or misleading statement
of a material fact in Form PF. Dually registered CPOs and CTAs must
file such other reports as are required under this section with respect
to all pools that are not private funds.
* * * * *

Securities and Exchange Commission

    For the reasons set out in the preamble, the SEC is proposing to
amend Title 17, Chapter II of the Code of Federal Regulations as
follows:

PART 275--RULES AND REGULATIONS, INVESTMENT ADVISERS ACT OF 1940

    3. The authority citation for part 275 continues to read in part as
follows:

    Authority:  15 U.S.C. 80b-2(a)(11)(G), 80b-2(a)(17), 80b-3, 80b-
4, 80b-4a, 80b-6(4), 80b-6a, and 80b-11, unless otherwise noted.
* * * * *
    4. Section 275.204(b)-1 is added to read as follows:

Sec.  275.204(b)-1  Reporting by investment advisers to private funds.

    (a) Reporting by investment advisers to private funds on Form PF.
Subject to paragraph (g), if you are an investment adviser registered
or required to be registered under section 203 of the Act (15 U.S.C.
80b-3) and act as an investment adviser to one or more private funds,
you must complete and file a report on Form PF (17 CFR 279.9) within 15
days of the end of the next calendar quarter by following the
instructions in the Form, which specify the information that an
investment adviser must provide.
    (b) Electronic filing. You must file Form PF electronically with
the Form PF filing system.

    Note to paragraph (b):  Information on how to file Form PF is
available on the Commission's Web site at http://www.sec.gov/[----].

    (c) When filed. Each Form PF is considered filed with the
Commission upon acceptance by the Form PF filing system.
    (d) Filing fees. You must pay the operator of the Form PF filing
system a filing fee as required by the instructions to Form PF. The
Commission has approved the amount of the filing fee. No portion of the
filing fee is refundable. Your completed Form PF will not be accepted
by the operator of the Form PF filing system, and thus will not be
considered filed with the Commission, until you have paid the filing
fee.
    (e) Amendments to Form PF. You must amend your Form PF:
    (1) At least annually, no later than the last day on which you may
timely file your annual amendment to Form ADV under rule 204-1(a)(1)
(17 CFR 275.204-1(a)(1)); and
    (2) More frequently, if required by the instructions to Form PF.
You must file all amendments to Form PF electronically with the Form PF
filing system.
    (f) Temporary hardship exemption. (1) If you have unanticipated
technical difficulties that prevent you from submitting Form PF on a
timely basis through the Form PF filing system, you may request a
temporary hardship exemption from the requirements of this section to
file electronically.
    (2) To request a temporary hardship exemption, you must:
    (i) Complete and file with the operator of the Form PF filing
system in paper format Item A of Section 1a and Section 5 of Form PF,
checking the box in Section 1a indicating that you are requesting a
temporary hardship exemption, no later than one business day after the
electronic Form PF filing was due; and
    (ii) Submit the filing that is the subject of the Form PF paper
filing in electronic format with the Form PF filing system no later
than seven business days after the filing was due.
    (3) The temporary hardship exemption will be granted when you file
Item A of Section 1a and Section 5 of Form PF, checking the box in
Section 1a indicating that you are requesting a temporary hardship
exemption.
    (g) Transition for certain filers. If you were an investment
adviser registered or required to be registered under section 203 of
the Act (15 U.S.C. 80b-3), act as an investment adviser to one or more
private funds immediately prior to the compliance date of rule 204(b)-
1, and are only required to complete all or portions of section 1 of
Form PF, no later than 90 days after the end of your then-current
fiscal year you must complete and file your initial report on Form PF
by following the instructions in the Form, which specify the
information that an investment adviser must provide.

PART 279--FORMS PRESCRIBED UNDER THE INVESTMENT ADVISERS ACT OF
1940

    5. The authority citation for part 279 continues to read as
follows:

    Authority: 15 U.S.C. 80b-1, et seq.

    6. Section 279.9 is added to read as follows:

Sec.  279.9  Form PF, reporting by investment advisers to private
funds.

    This form shall be filed pursuant to Rule 204(b)-1 (Sec.
275.204(b)-1 of this chapter) by certain investment advisers registered
or required to register under section 203 of the Act (15 U.S.C. 80b-3)
that act as an investment adviser to one or more private funds.

    Note: The following Form PF will not appear in the Code of
Federal Regulations.

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    By the Commodity Futures Trading Commission.
    Dated: January 26, 2011.
David A. Stawick,
Secretary.
    By the Securities and Exchange Commission.

    Dated: January 26, 2011.
Elizabeth M. Murphy,
Secretary.

Appendix 1--Commodity Futures Trading Commission Voting Summary

    On this matter, Chairman Gensler and Commissioners Dunn, Sommers
(by proxy), Chilton and O'Malia voted in the affirmative; no
Commissioner voted in the negative.

[FR Doc. 2011-2175 Filed 2-10-11; 8:45 am]
BILLING CODE 8011-01-P; 6351-01-P