# Form pf `kaal:entity:form-pf` **Status.** derived This node is assembled mechanically from the 129 claims that carry the concept tag `form-pf`. It is a roster of what the corpus says under this term. It is **not** an adjudicated definition: no single statement here has been ruled canonical, and no first-appearance call has been made. Read the claims and judge for yourself. ## Every claim under this term 129 claims across 12 works, 2012 to 2017. **2012** - [2150377-010](https://wulfkaal.github.io/claims/2150377-010) [empirical/evidenced] -- Form PF reporting achieves broad coverage of systemic exposure with narrow coverage of firms: the SEC expects the small set of large filers to account for eighty percent of total hedge fund assets under management in the United States. > The SEC expects this relatively small number of advisers to account for 80% of total hedge fund assets under management in the United States.145 Wulf A. Kaal, Hedge Fund Manager Registration Under the Dodd-Frank Act (2012). SSRN: https://ssrn.com/abstract=2150377 - [2150377-011](https://wulfkaal.github.io/claims/2150377-011) [design/evidenced] -- Quarterly rather than annual Form PF updating for large hedge fund advisers is designed for timeliness: its purpose is to give the Financial Stability Oversight Council data current enough to identify emerging trends in systemic risk. > Mandatory quarterly reporting for large hedge fund advisers in the United States aligns with international trends and is intended "to provide the FSOC with timely data to identify emerging trends in systemic risk."151 Wulf A. Kaal, Hedge Fund Manager Registration Under the Dodd-Frank Act (2012). SSRN: https://ssrn.com/abstract=2150377 - [2150377-027](https://wulfkaal.github.io/claims/2150377-027) [empirical/evidenced] -- The Form PF quarterly reporting threshold of $1.5 billion in assets under management is not a binding sizing constraint for most advisers: 80.46% would not take it into account in determining fund size, while 19.54% would. > Of those who responded, 80.46% would not take the Form PF threshold for quarterly reporting of $1.5 billion AUM into account in determining the appropriate size of AUM for the fund(s) they manage, whereas 19.54% would take it into account. Wulf A. Kaal, Hedge Fund Manager Registration Under the Dodd-Frank Act (2012). SSRN: https://ssrn.com/abstract=2150377 - [2150377-028](https://wulfkaal.github.io/claims/2150377-028) [mechanism/evidenced] *(failure mode)* -- Where the Form PF quarterly reporting threshold does influence behavior, it distorts fund size downward: a majority of the advisers who take the threshold into account plan to stay under $1.5 billion in assets under management, and some would close funds to new investors to do so. > A majority of those respondents who would take it into account plan to stay under the Form PF threshold for quarterly reporting of $1.5 billion AUM. Wulf A. Kaal, Hedge Fund Manager Registration Under the Dodd-Frank Act (2012). SSRN: https://ssrn.com/abstract=2150377 - [2150377-039](https://wulfkaal.github.io/claims/2150377-039) [mechanism/speculative] *(failure mode)* -- Mandatory reporting does not guarantee informative reporting: anecdotal evidence indicates that advisers can present the information required in Forms ADV and PF in ways that in effect flatten out and sanitize the disclosures. > Anecdotal evidence suggests that the information disclosed by hedge fund advisers in the required Forms ADV and PF can be presented in ways that in effect "flatten out" and "sanitize" the disclosures. Wulf A. Kaal, Hedge Fund Manager Registration Under the Dodd-Frank Act (2012). SSRN: https://ssrn.com/abstract=2150377 - [2150377-040](https://wulfkaal.github.io/claims/2150377-040) [failure/speculative] *(failure mode)* -- If advisers sanitize their Form ADV and Form PF filings, the disclosures become less useful for FSOC and SEC evaluation and undermine the very determination of systemic risk posed by private funds that the reporting regime was built to enable. > Although the level of sanitizing of disclosures cannot be verified, sanitized disclosures could be less useful for FSCO and SEC evaluation and their determination of the systemic risk posed by private funds. Wulf A. Kaal, Hedge Fund Manager Registration Under the Dodd-Frank Act (2012). SSRN: https://ssrn.com/abstract=2150377 **2013** - [2337268-013](https://wulfkaal.github.io/claims/2337268-013) [definitional/asserted] -- Advisers with more than $150 million in regulatory assets under management are defined as large private fund advisers and must register with the SEC. > Investment advisers having more than $150 million regulatory assets under management (RAUM) are defined as large private fund advisers and are required to register with the SEC.23 Wulf A. Kaal, Investment Adviser Regulation (2013). SSRN: https://ssrn.com/abstract=2337268 - [2337268-021](https://wulfkaal.github.io/claims/2337268-021) [design/asserted] -- Form PF was created to improve SEC and CFTC investigations and examinations and to enable the Financial Stability Oversight Council to monitor systemic risk in U.S. financial markets. > Form PF was enacted in October 201164 to improve investigations and examinations by the SEC and the Commodity Futures Trading Commission (CFTC) and to facilitate the FSOC's65 monitoring of systemic risk in U.S. financial markets.66 Wulf A. Kaal, Investment Adviser Regulation (2013). SSRN: https://ssrn.com/abstract=2337268 - [2337268-022](https://wulfkaal.github.io/claims/2337268-022) [design/asserted] -- Form PF filings, unlike Form ADV filings, are confidential and not publicly available, so the systemic risk disclosure regime is built for regulators rather than for market or investor scrutiny. > Unlike Form ADV, Form PF filings are confidential and not publicly available. Wulf A. Kaal, Investment Adviser Regulation (2013). SSRN: https://ssrn.com/abstract=2337268 - [2337268-023](https://wulfkaal.github.io/claims/2337268-023) [condition/asserted] -- The frequency of Form PF reporting is keyed to size: advisers with at least $1.5 billion RAUM attributable to hedge funds must update quarterly, while advisers below that level file only annually. > Large private fund advisers, defined as investment advisers with at least $1.5 billion RAUM attributable to hedge funds,67 must update Form PF filings on a quarterly basis.68 Investment advisers with less than $1.5 billion RAUM only have to file Form PF on an annual basis.69 Wulf A. Kaal, Investment Adviser Regulation (2013). SSRN: https://ssrn.com/abstract=2337268 - [2337268-024](https://wulfkaal.github.io/claims/2337268-024) [design/argued] -- Quarterly rather than annual reporting by large private fund advisers is intended to give the FSOC data timely enough to identify emerging systemic risk trends. > The quarterly reporting for large private fund advisers is intended to provide the FSOC with timely data to identify emerging trends in systemic risk. Wulf A. Kaal, Investment Adviser Regulation (2013). SSRN: https://ssrn.com/abstract=2337268 - [2337268-025](https://wulfkaal.github.io/claims/2337268-025) [design/asserted] -- Form PF requires disclosure of the reporting fund's positions and how long it would take to liquidate them, because the SEC needs a view of portfolio liquidity rather than positions alone. > To help the SEC understand the liquidity of the reporting fund's portfolios, Form PF requires the investment adviser to disclose the reporting fund's positions and how long it would take to liquidate them.78 Wulf A. Kaal, Investment Adviser Regulation (2013). SSRN: https://ssrn.com/abstract=2337268 - [2348463-001](https://wulfkaal.github.io/claims/2348463-001) [empirical/evidenced] -- There is a substantial overlap between the systemic risk disclosure requirements imposed on hedge fund advisers under Title IV of the Dodd-Frank Act and the disclosure requirements under the fully revised version of Bankruptcy Rule 2019. > The author provides evidence of a substantial overlap between systemic risk disclosure requirements under Title IV and the disclosure requirements under the fully-revised version of Bankruptcy Rule 2019 (Revised Rule 2019). Wulf A. Kaal, Hedge Funds’ Systemic Risk Disclosures in Bankruptcy (2013). SSRN: https://ssrn.com/abstract=2348463 - [2348463-002](https://wulfkaal.github.io/claims/2348463-002) [predictive/argued] *(failure mode)* -- Under the regulatory framework in place at the time of writing, the threat that hedge funds' systemic risk filings could be publicly disclosed through the bankruptcy process will affect hedge funds' tactics and their role in distressed investing only marginally. > In the current regulatory framework, the threat of public disclosure of systemic risk filings by hedge funds via the bankruptcy process may only marginally affect hedge funds' tactics and their role in distressed investing. Wulf A. Kaal, Hedge Funds’ Systemic Risk Disclosures in Bankruptcy (2013). SSRN: https://ssrn.com/abstract=2348463 - [2348463-007](https://wulfkaal.github.io/claims/2348463-007) [failure/evidenced] *(failure mode)* -- The SEC has not standardized the disclosures required in Form PF, and there is evidence that Form PF requirements rest on an inconsistent use of industry terms, which can in turn produce inconsistent and contradictory data reporting. > The SEC has not yet standardized the required disclosures in Form PF and there is some evidence that the disclosure requirements in Form PF are based on an inconsistent use of industry terms which may in turn result in inconsistent and perhaps contradictory data reporting. Wulf A. Kaal, Hedge Funds’ Systemic Risk Disclosures in Bankruptcy (2013). SSRN: https://ssrn.com/abstract=2348463 - [2348463-016](https://wulfkaal.github.io/claims/2348463-016) [definitional/asserted] -- Systemic risk reports filed by registered investment advisers are confidential and are not publicly available, so any effect of these filings on bankruptcy practice depends on the prospect of disclosure rather than on actual public access. > These reports are confidential and not publicly available. Wulf A. Kaal, Hedge Funds’ Systemic Risk Disclosures in Bankruptcy (2013). SSRN: https://ssrn.com/abstract=2348463 - [2348463-017](https://wulfkaal.github.io/claims/2348463-017) [design/evidenced] -- Mandatory quarterly Form PF reporting for large hedge fund advisers is designed to give the Financial Stability Oversight Council timely data for identifying emerging systemic risk trends and to align United States practice with international trends. > Mandatory quarterly reporting for large hedge fund advisers in the United States is intended to provide the FSOC with timely data to identify emerging trends in systemic risk and align with international trends. Wulf A. Kaal, Hedge Funds’ Systemic Risk Disclosures in Bankruptcy (2013). SSRN: https://ssrn.com/abstract=2348463 - [2348463-019](https://wulfkaal.github.io/claims/2348463-019) [failure/argued] *(failure mode)* -- Under both the bankruptcy and the systemic risk disclosure regimes, filed data carries a serious risk of being out of date and less accurate at the time it is analyzed than when it was disclosed, partly because of the lag needed to collect data before filing. > It is important to note that for purposes of any analysis of filed data under either disclosure system, there is a serious risk that data may be out of date and less accurate when analysed than at the time when it was disclosed. Wulf A. Kaal, Hedge Funds’ Systemic Risk Disclosures in Bankruptcy (2013). SSRN: https://ssrn.com/abstract=2348463 - [2348463-021](https://wulfkaal.github.io/claims/2348463-021) [empirical/evidenced] -- Form PF's required disclosure of a reporting fund's strategies includes a separate subcategory for event driven, distressed and restructuring strategies, which is what makes the form potentially relevant to bankruptcy proceedings. > Importantly, Form PF's required disclosure of reporting funds' strategies includes a separate subcategory for "Event Driven, Distressed/Restructuring". Wulf A. Kaal, Hedge Funds’ Systemic Risk Disclosures in Bankruptcy (2013). SSRN: https://ssrn.com/abstract=2348463 - [2348463-022](https://wulfkaal.github.io/claims/2348463-022) [failure/evidenced] *(failure mode)* -- Form PF disclosures have not been standardized, and anecdotal evidence indicates that the SEC and the FSOC may be working with contradictory, misleading, inaccurate, and incomplete systemic risk data. > Form PF disclosures have not yet been standardized, and anecdotal evidence suggests that the SEC and the FSOC could be working with contradictory, misleading, inaccurate, and incomplete systemic risk data in Form PF. Wulf A. Kaal, Hedge Funds’ Systemic Risk Disclosures in Bankruptcy (2013). SSRN: https://ssrn.com/abstract=2348463 - [2348463-023](https://wulfkaal.github.io/claims/2348463-023) [predictive/argued] *(failure mode)* -- Because the SEC is still working out the appropriate use of Form PF and still improving the form and its instructions, its enforcement division is unlikely to open investigations into alleged misreporting or failures to report. > While the SEC is still ascertaining the appropriate use of Form PF and improving Form PF and the instructions to it, it is unlikely that the SEC's enforcement division will start investigations into alleged misreporting or failures to report. Wulf A. Kaal, Hedge Funds’ Systemic Risk Disclosures in Bankruptcy (2013). SSRN: https://ssrn.com/abstract=2348463 - [2348463-024](https://wulfkaal.github.io/claims/2348463-024) [mechanism/argued] -- Form PF's systemic risk disclosure obligations were created, in a non-bankruptcy context, precisely to counteract the kind of shadow activity that is now resurfacing in bankruptcy under Revised Rule 2019. > Systemic risk disclosure obligations in Form PF were created, albeit in a different context than bankruptcy, to circumvent the very shadow activities that appear to be resurfacing in the bankruptcy context under Revised Rule 2019. Wulf A. Kaal, Hedge Funds’ Systemic Risk Disclosures in Bankruptcy (2013). SSRN: https://ssrn.com/abstract=2348463 - [2348463-027](https://wulfkaal.github.io/claims/2348463-027) [predictive/argued] -- The overlap between hedge fund adviser disclosures under Revised Rule 2019 and systemic risk disclosures under Form PF, combined with the uncertainties Revised Rule 2019 created, points to a possible future role for systemic risk disclosures in bankruptcy. > The commonalities of hedge fund adviser disclosures under Revised Rule 2019 and systemic risk disclosures under Form PF 198 in combination with the uncertainties created by Revised Rule 2019199 suggest that there could be a possible future role for systemic risk disclosures in bankruptcy. Wulf A. Kaal, Hedge Funds’ Systemic Risk Disclosures in Bankruptcy (2013). SSRN: https://ssrn.com/abstract=2348463 - [2348463-028](https://wulfkaal.github.io/claims/2348463-028) [failure/argued] *(failure mode)* -- Form PF disclosures in their existing format are too generic to be appropriately applied in bankruptcy, but accumulated experience with the form and standardization of its items could yield less generic disclosures that become increasingly relevant to bankruptcy over time. > While Form PF disclosures in their existing format are too generic for appropriate application in the bankruptcy context, experience with and standardization of Form PF disclosures could result in less generic disclosures that could, over time, be increasingly relevant in the bankruptcy context. Wulf A. Kaal, Hedge Funds’ Systemic Risk Disclosures in Bankruptcy (2013). SSRN: https://ssrn.com/abstract=2348463 - [2348463-029](https://wulfkaal.github.io/claims/2348463-029) [mechanism/argued] -- If Form PF systemic risk data became publicly available, or even only available to the presiding bankruptcy judge in a chapter 9 or chapter 11 case, the hedge fund industry's strong preference for secrecy could itself precipitate a change in distressed investment practices. > If systemic risk data in Form PF becomes publicly available or even only available to the respective bankruptcy judge in a chapter 9 or chapter 11 case, the hedge fund industry's penchant for secrecy could perhaps precipitate a change in hedge funds' distressed investment practices. Wulf A. Kaal, Hedge Funds’ Systemic Risk Disclosures in Bankruptcy (2013). SSRN: https://ssrn.com/abstract=2348463 - [2348463-031](https://wulfkaal.github.io/claims/2348463-031) [design/argued] -- Disclosing otherwise private and proprietary Form PF systemic risk data exclusively to bankruptcy judges could alleviate the hedge fund industry's concerns about privacy and about the reverse engineering of its strategies and positions. > Exclusive disclosure of otherwise private and proprietary systemic risk data in Form PF to bankruptcy judges could potentially alleviate the hedge fund industry's concerns over privacy and reverse engineering of strategies and positions. Wulf A. Kaal, Hedge Funds’ Systemic Risk Disclosures in Bankruptcy (2013). SSRN: https://ssrn.com/abstract=2348463 - [2348463-033](https://wulfkaal.github.io/claims/2348463-033) [failure/argued] *(failure mode)* -- Because systemic risk disclosures are far more generic and are not tailored to any specific distressed investment, importing them into bankruptcy would improve only marginally the information available about the motives of distressed securities investors. > Hence, with regard to disclosure of possible motives of hedge fund investors in bankruptcy, systemic risk disclosures in the bankruptcy context would only marginally improve the availability of relevant information pertaining to possible motives of distressed securities investors. Wulf A. Kaal, Hedge Funds’ Systemic Risk Disclosures in Bankruptcy (2013). SSRN: https://ssrn.com/abstract=2348463 - [2348463-036](https://wulfkaal.github.io/claims/2348463-036) [failure/argued] *(failure mode)* -- There is a real risk that increased disclosure through Form PF would destroy the balance of power in the restructuring process. > In summary, there is a real risk that increased disclosures via Form PF would destroy the balance of power in the restructuring process. Wulf A. Kaal, Hedge Funds’ Systemic Risk Disclosures in Bankruptcy (2013). SSRN: https://ssrn.com/abstract=2348463 - [2348463-037](https://wulfkaal.github.io/claims/2348463-037) [failure/argued] *(failure mode)* -- Bankruptcy judges and the parties to a bankruptcy case may be unable to adequately evaluate Form PF data pertaining to a creditor, which limits the usefulness of that data in bankruptcy. > Bankruptcy judges and/or the respective parties in a bankruptcy case may be unable to adequately evaluate Form PF data pertaining to a creditor in a bankruptcy case. Wulf A. Kaal, Hedge Funds’ Systemic Risk Disclosures in Bankruptcy (2013). SSRN: https://ssrn.com/abstract=2348463 - [2348463-038](https://wulfkaal.github.io/claims/2348463-038) [failure/argued] *(failure mode)* -- Using generic and possibly outdated systemic risk data in the bankruptcy process would not improve hedge funds' bankruptcy practices in the near term. > The use of generic and possibly outdated systemic risk data in the bankruptcy process would therefore not improve hedge funds' practices in bankruptcy in the near term. Wulf A. Kaal, Hedge Funds’ Systemic Risk Disclosures in Bankruptcy (2013). SSRN: https://ssrn.com/abstract=2348463 **2014** - [2389416-011](https://wulfkaal.github.io/claims/2389416-011) [design/asserted] -- The quarterly Form PF reporting obligation imposed on hedge fund advisers with more than $1.5 billion in regulatory assets under management is designed to give the FSOC timely data for identifying systemic risk trends. > The quarterly reporting requirement for large hedge fund advisers is intended to provide timely data that enables the FSOC to identify trends in systemic risk (IA Release 3308). Wulf A. Kaal, Barbara Luppi, Sandra Paterlini, Did the Dodd-Frank Act Impact Hedge Fund Performance (2014). SSRN: https://ssrn.com/abstract=2389416 - [2389416-040](https://wulfkaal.github.io/claims/2389416-040) [empirical/evidenced] -- The SEC's collection of proprietary hedge fund data through Forms ADV and PF does not negatively affect the performance of the hedge fund industry as a whole, and appears to affect only a subset of the industry. > The preliminary results in this study suggest that the SEC's collection of proprietary hedge fund data via Forms ADV and PF does not negatively impact the hedge fund industry's performance as a whole. It seems to affect merely a subset of the hedge fund industry. Wulf A. Kaal, Barbara Luppi, Sandra Paterlini, Did the Dodd-Frank Act Impact Hedge Fund Performance (2014). SSRN: https://ssrn.com/abstract=2389416 - [2389423-013](https://wulfkaal.github.io/claims/2389423-013) [definitional/asserted] -- Registered investment advisers must report systemic risk relevant information to the SEC, including trading practices, trading and investment positions, the amount of assets under management, valuation policies, and side letters. > Investment advisers must provide reports with respect to certain information related to systemic risk (Dodd-Frank § 404(b)(3)), such as trading practices, trading and investment positions, the amount of AUM, valuation policies, side letters Wulf A. Kaal, The Impact of Dodd-Frank Act Compliance Cost on the Hedge Fund Industry (2014). SSRN: https://ssrn.com/abstract=2389423 - [2389423-017](https://wulfkaal.github.io/claims/2389423-017) [mechanism/asserted] -- Form PF is structured so that single strategy fund advisers collect and provide only a fraction of the information a multi strategy adviser must make available, which makes reporting burden a function of strategy count rather than of adviser size. > Form PF is structured in a way that allows single strategy fund advisers to collect and provide a fraction of the information a multi strategy adviser would be required to make available under Form PF. Wulf A. Kaal, The Impact of Dodd-Frank Act Compliance Cost on the Hedge Fund Industry (2014). SSRN: https://ssrn.com/abstract=2389423 - [2389423-018](https://wulfkaal.github.io/claims/2389423-018) [mechanism/argued] -- Because Form PF requires less information from single strategy advisers, hedge fund advisers that apply only a single strategy to their portfolios may incur overall lower compliance cost. > Accordingly, hedge fund advisers that apply only a single strategy to their respective portfolios may incur overall lower compliance cost. Wulf A. Kaal, The Impact of Dodd-Frank Act Compliance Cost on the Hedge Fund Industry (2014). SSRN: https://ssrn.com/abstract=2389423 - [2447306-001](https://wulfkaal.github.io/claims/2447306-001) [definitional/asserted] -- Title IV of the Dodd-Frank Act and the SEC rules implementing it produced a paradigm shift in United States private fund regulation, raising regulatory oversight of an industry that had been largely exempt to unprecedented levels. > Title IV and Securities and Exchange Commission (SEC) rules implementing the requirements under Title IV created a paradigm shift for the regulation of private funds in the United States, increasing the level of regulatory oversight to unprecedented levels. Wulf A. Kaal, Private Fund Disclosures Under the Dodd-Frank Act (2014). SSRN: https://ssrn.com/abstract=2447306 - [2447306-002](https://wulfkaal.github.io/claims/2447306-002) [definitional/asserted] -- The Form PF filing obligation is triggered by a bright line asset threshold: every registered investment adviser with more than $150 million in assets under management attributable to private funds at the end of its most recently completed fiscal year must file. > All registered investment advisers holding more than $150 million in assets under management (AUM) attributable to private funds at the end of their most recently completed fiscal year, are required to file Form PF with the SEC. Wulf A. Kaal, Private Fund Disclosures Under the Dodd-Frank Act (2014). SSRN: https://ssrn.com/abstract=2447306 - [2447306-003](https://wulfkaal.github.io/claims/2447306-003) [failure/asserted] *(failure mode)* -- Form PF's counterparty credit exposure requirement is difficult to satisfy at the source, because the exposure is highly sensitive information that individual fund managers often cannot readily determine. > For instance, the disclosure of counterparty credit exposure is sensitive information that can often not readily be determined by the individual fund managers. Wulf A. Kaal, Private Fund Disclosures Under the Dodd-Frank Act (2014). SSRN: https://ssrn.com/abstract=2447306 - [2447306-004](https://wulfkaal.github.io/claims/2447306-004) [mechanism/argued] *(failure mode)* -- If advisers' allegations that Form PF disclosures cannot be answered other than by guessing are correct, then the SEC's capacity to evaluate the data is compromised, and regulation built on incomplete and misleading data will itself be questionable. > If these allegations should be true, the SEC's ability to evaluate and assess the data could be compromised. The use of incomplete and misleading data could lead to the development of questionable policies and regulations applicable to the private fund industry. Wulf A. Kaal, Private Fund Disclosures Under the Dodd-Frank Act (2014). SSRN: https://ssrn.com/abstract=2447306 - [2447306-005](https://wulfkaal.github.io/claims/2447306-005) [empirical/argued] -- Prior scholarship, including the author's own earlier work, established that Form PF created core challenges for the private fund industry but did not clarify what impact the disclosure requirements actually have on managers; this study is designed to fill that gap. > While prior studies have acknowledged that the SEC's mandated collection of private fund data via Form PF created several core challenges for the private fund industry, these studies do not sufficiently clarify the impact of Form PF disclosure requirements on managers. Wulf A. Kaal, Private Fund Disclosures Under the Dodd-Frank Act (2014). SSRN: https://ssrn.com/abstract=2447306 - [2447306-009](https://wulfkaal.github.io/claims/2447306-009) [empirical/evidenced] -- The near identity between respondents who reported completing Sections 2 through 5 of Form PF and respondents who reported quarterly filing shows the answers are internally consistent, which the author treats as evidence that the survey responses carry above average reliability. > The comparison of Questions 2 and 3 thus illustrates that the responses to both questions are internally consistent. The internal consistency of these responses suggests that the survey responses have an above average reliability. Wulf A. Kaal, Private Fund Disclosures Under the Dodd-Frank Act (2014). SSRN: https://ssrn.com/abstract=2447306 - [2447306-010](https://wulfkaal.github.io/claims/2447306-010) [empirical/evidenced] -- Despite contacting the entire population of 3669 SEC-registered private fund advisers by fax and e-mail over more than five months, the study obtained only 52 respondents, a response rate of 0.014 percent. > After multiple attempts to reach the entire population in over five months, respondents ([n=52]) (0.014%) answered questions in several categories designed to identify the effectiveness of Form PF. Wulf A. Kaal, Private Fund Disclosures Under the Dodd-Frank Act (2014). SSRN: https://ssrn.com/abstract=2447306 - [2447306-011](https://wulfkaal.github.io/claims/2447306-011) [empirical/evidenced] -- Advisers themselves understand Form PF's purpose the way the statute frames it: most respondents identified assessing systemic risk and closing the historical information gap about private funds as the form's purpose. > Most advisers assert that the purpose of Form PF is to assess systemic risk and address the lack of information regarding private funds. Wulf A. Kaal, Private Fund Disclosures Under the Dodd-Frank Act (2014). SSRN: https://ssrn.com/abstract=2447306 - [2447306-012](https://wulfkaal.github.io/claims/2447306-012) [empirical/evidenced] -- Initial Form PF compliance was inexpensive for most filers: 59.18 percent of respondents put the total cost of completing Form PF for the first time under $10,000. > The majority of respondents (59.18%) indicated that the total estimated cost of first time Form PF completion was under $10,000.00. Wulf A. Kaal, Private Fund Disclosures Under the Dodd-Frank Act (2014). SSRN: https://ssrn.com/abstract=2447306 - [2447306-013](https://wulfkaal.github.io/claims/2447306-013) [empirical/evidenced] -- Form PF compliance cost is sharply size dependent: quarterly filing large funds spent on average $155,286 on the initial filing, roughly sixteen times the $9,520 average reported by annually filing smaller funds. > Quarterly filing large funds spent on average $155,286 for the initial filing of Form PF. By contrast, annually filing smaller funds only spend on average $9,520 for the first time filing of Form PF. Wulf A. Kaal, Private Fund Disclosures Under the Dodd-Frank Act (2014). SSRN: https://ssrn.com/abstract=2447306 - [2447306-014](https://wulfkaal.github.io/claims/2447306-014) [empirical/evidenced] -- Measured against this study's survey data, the SEC marginally overestimated the cost of the initial Form PF filing for both annually filing smaller advisers and quarterly filing larger advisers. > The cross-comparison suggests that the SEC may be marginally overestimating the cost of Form PF filings for both annually filing smaller private fund advisers and quarterly filing larger private fund advisers. Wulf A. Kaal, Private Fund Disclosures Under the Dodd-Frank Act (2014). SSRN: https://ssrn.com/abstract=2447306 - [2447306-015](https://wulfkaal.github.io/claims/2447306-015) [empirical/evidenced] -- Recurring Form PF cost is also size dependent: quarterly filing large fund advisers pay on average $72,143 for subsequent filings while smaller advisers spend on average $5,262. > Quarterly filing large fund advisers on average pay $72,143 for subsequent Form PF filings. Smaller private fund advertiser, on the other hand, spent only on average $5,262 for subsequent Form PF filings. Wulf A. Kaal, Private Fund Disclosures Under the Dodd-Frank Act (2014). SSRN: https://ssrn.com/abstract=2447306 - [2447306-016](https://wulfkaal.github.io/claims/2447306-016) [empirical/evidenced] -- For quarterly filing larger private fund advisers, the SEC substantially overestimated the cost of subsequent Form PF filings; the survey's estimate is roughly half of what the SEC projected. > With regards to quarterly filing larger private fund advisers, however, the SEC appears to be substantially overestimating the cost of subsequent Form PF filings. Wulf A. Kaal, Private Fund Disclosures Under the Dodd-Frank Act (2014). SSRN: https://ssrn.com/abstract=2447306 - [2447306-017](https://wulfkaal.github.io/claims/2447306-017) [empirical/evidenced] -- The SEC's error runs in the opposite direction for small advisers on recurring filings: the agency marginally underestimated the cost of subsequent Form PF filings for annually filing smaller private fund advisers. > The cross-comparison suggests that the SEC may be marginally underestimating the cost of Form PF filings for annually filing smaller private fund advisers. Wulf A. Kaal, Private Fund Disclosures Under the Dodd-Frank Act (2014). SSRN: https://ssrn.com/abstract=2447306 - [2447306-018](https://wulfkaal.github.io/claims/2447306-018) [empirical/evidenced] -- The SEC's time burden estimates for Form PF are miscalibrated in the same direction as its cost estimates for large filers: the study's data suggest the agency overestimates the hours larger private fund advisers need. > However, the relatively small sample of quarterly filing larger private fund advisers in this study suggest that the SEC may be overestimating the time requirements of Form PF filings for larger private fund advisers. Wulf A. Kaal, Private Fund Disclosures Under the Dodd-Frank Act (2014). SSRN: https://ssrn.com/abstract=2447306 - [2447306-019](https://wulfkaal.github.io/claims/2447306-019) [empirical/evidenced] -- Form PF compliance is not staff intensive for most filers: 67.35 percent of respondents used only one to three individuals and 69.39 percent reported the work took staff less than 50 hours. > A majority of respondents (67.35%) used only one to three individuals to complete Form PF. Similarly, a majority of respondents (69.39%) indicated that it took staff less than 50 hours to complete Form PF. Wulf A. Kaal, Private Fund Disclosures Under the Dodd-Frank Act (2014). SSRN: https://ssrn.com/abstract=2447306 - [2447306-020](https://wulfkaal.github.io/claims/2447306-020) [empirical/evidenced] -- The Form PF burden is concentrated in a few identifiable items: respondents ranked Question 16 on types of investors as the most time consuming, followed by Question 17 on performance and Question 7 on related persons. > Among all Form PF questions that were identified as time-consuming, respondents indicated that Form PF Question 16 (types of investors) took the most time to answer, followed by Form PF Question 17 (performance), and Form PF Question 7 (related persons). Wulf A. Kaal, Private Fund Disclosures Under the Dodd-Frank Act (2014). SSRN: https://ssrn.com/abstract=2447306 - [2447306-021](https://wulfkaal.github.io/claims/2447306-021) [mechanism/evidenced] -- The dominant driver of Form PF time consumption is data gathering rather than form completion: 36 percent of respondents named data gathering as the task consuming most of their time, followed by delta options and ambiguous questions or unclear instructions. > The majority of respondents (36%) identified "Data Gathering" as the task on which they spent the majority of their time, followed by references to "Delta Options" and "Ambiguous questions / unclear instructions". Wulf A. Kaal, Private Fund Disclosures Under the Dodd-Frank Act (2014). SSRN: https://ssrn.com/abstract=2447306 - [2447306-022](https://wulfkaal.github.io/claims/2447306-022) [empirical/evidenced] *(failure mode)* -- Asked what the SEC should fix first, respondents named the burdensome nature and the ambiguity of Form PF as the most pressing issues, not the substance of what is disclosed. > Respondents identified the burdensome nature and the ambiguity of Form PF as the most pressing issues with Form PF. Wulf A. Kaal, Private Fund Disclosures Under the Dodd-Frank Act (2014). SSRN: https://ssrn.com/abstract=2447306 - [2447306-023](https://wulfkaal.github.io/claims/2447306-023) [empirical/evidenced] -- Complaints about Form PF's ambiguity coexist with acceptance of its substance: the same majority that flagged ambiguity as the most pressing issue also considered their existing reporting systems adequate and agreed with the SEC's definitions and instructions. > However, the majority of respondents also considered their existing reporting systems adequate for capturing the information required by the SEC and agreed with the SEC's definitions and instructions for Form PF. Wulf A. Kaal, Private Fund Disclosures Under the Dodd-Frank Act (2014). SSRN: https://ssrn.com/abstract=2447306 - [2447306-024](https://wulfkaal.github.io/claims/2447306-024) [failure/evidenced] *(failure mode)* -- Form PF's definition of leverage is overinclusive: respondents reported that it is inappropriately constructed and sweeps in funds that use neither leverage nor derivative securities. > Several respondents suggested that the definition of leverage is inappropriately constructed and can include funds that don't use leverage or any derivative securities. Wulf A. Kaal, Private Fund Disclosures Under the Dodd-Frank Act (2014). SSRN: https://ssrn.com/abstract=2447306 - [2447306-025](https://wulfkaal.github.io/claims/2447306-025) [empirical/evidenced] *(failure mode)* -- Regulatory assets under management is an unstable reporting concept: commenters split evenly on whether Form PF's RAUM questions required them to interpret the term in order to answer. > Commenters were equally split on whether Form PF questions pertaining to calculating RAUM required filers to interpret RAUM for purposes of completing Form PF. Wulf A. Kaal, Private Fund Disclosures Under the Dodd-Frank Act (2014). SSRN: https://ssrn.com/abstract=2447306 - [2447306-026](https://wulfkaal.github.io/claims/2447306-026) [empirical/evidenced] -- Contrary to the industry's public complaints about SEC support, a majority of respondents rated the best level of SEC staff guidance available for completing Form PF as sufficient or good. > A majority of respondents assessed the best level of SEC guidance in the context of their Form PF completion as sufficient or good. Wulf A. Kaal, Private Fund Disclosures Under the Dodd-Frank Act (2014). SSRN: https://ssrn.com/abstract=2447306 - [2447306-027](https://wulfkaal.github.io/claims/2447306-027) [empirical/evidenced] *(failure mode)* -- Where SEC guidance failed, the failure was localized: respondents who found guidance inadequate pointed predominantly to Form PF Section 1c, Item B, which concerns information about the reporting fund. > The majority of the commenters who believed that SEC guidance was inadequate indicated that SEC guidance was particularly unclear with respect to Form PF Section 1c, Item B (regarding Reporting Funds). Wulf A. Kaal, Private Fund Disclosures Under the Dodd-Frank Act (2014). SSRN: https://ssrn.com/abstract=2447306 - [2447306-028](https://wulfkaal.github.io/claims/2447306-028) [empirical/evidenced] -- SEC flexibility in answering Form PF questions is valued by filers: 72.92 percent of respondents said the flexibility the SEC provides is helpful. > Most respondents (72.92%) agreed that the SEC's flexibility in answering questions with respect to Form PF was helpful. Wulf A. Kaal, Private Fund Disclosures Under the Dodd-Frank Act (2014). SSRN: https://ssrn.com/abstract=2447306 - [2447306-029](https://wulfkaal.github.io/claims/2447306-029) [mechanism/evidenced] -- SEC flexibility helps filers through a specific mechanism: it authorizes advisers to apply their own internal methodologies when interpreting and answering Form PF questions and to state their own assumptions, rather than forcing them onto an unfamiliar measurement basis. > the most significant benefits of SEC flexibility were that respondents believed they were authorized to use their internal methodologies to interpret and respond to questions, and to articulate their assumptions Wulf A. Kaal, Private Fund Disclosures Under the Dodd-Frank Act (2014). SSRN: https://ssrn.com/abstract=2447306 - [2447306-030](https://wulfkaal.github.io/claims/2447306-030) [failure/evidenced] *(failure mode)* -- Regulatory flexibility can backfire: a category of respondents reported that the flexibility the SEC provides is not useful precisely because it is unclear and generates confusion. > Another category of responses indicated that the flexibility provided by the SEC is not useful because it is not clear and creates confusion. Wulf A. Kaal, Private Fund Disclosures Under the Dodd-Frank Act (2014). SSRN: https://ssrn.com/abstract=2447306 - [2447306-031](https://wulfkaal.github.io/claims/2447306-031) [empirical/evidenced] -- Most private fund advisers did not need new infrastructure to comply: 65.22 percent reported that their existing internal reporting systems adequately capture the information Form PF requires. > A majority of respondents (65.22%) stated that their existing internal reporting systems adequately capture the information required by Form PF. Wulf A. Kaal, Private Fund Disclosures Under the Dodd-Frank Act (2014). SSRN: https://ssrn.com/abstract=2447306 - [2447306-032](https://wulfkaal.github.io/claims/2447306-032) [failure/evidenced] *(failure mode)* -- For a substantial minority, existing systems fail Form PF for a specific reason: 34.78 percent of respondents said their internal reporting systems were insufficient because the required answers demand further analysis and calculation beyond what the systems already produce. > Several respondents (34.78%) opined that their existing internal reporting systems were insufficient to respond to questions on Form PF because they require further analysis and calculations. Wulf A. Kaal, Private Fund Disclosures Under the Dodd-Frank Act (2014). SSRN: https://ssrn.com/abstract=2447306 - [2447306-033](https://wulfkaal.github.io/claims/2447306-033) [empirical/evidenced] -- Form PF's counterparty disclosure proved far less burdensome in practice than anticipated: 93.75 percent of respondents encountered no difficulty identifying counterparties for the counterparty credit exposure questions. > Figure 35 shows that the overwhelming majority of respondents (93.75%) did not encounter difficulties in identifying counterparties to answer Form PF questions about counterparty credit exposure. Wulf A. Kaal, Private Fund Disclosures Under the Dodd-Frank Act (2014). SSRN: https://ssrn.com/abstract=2447306 - [2447306-034](https://wulfkaal.github.io/claims/2447306-034) [empirical/argued] -- Because only 27.08 percent of respondents used a service provider to complete Form PF, the widespread concern that outside service providers would overinterpret required Form PF data on filers' behalf appears unjustified. > This seems to suggest that concerns over service providers (over)interpreting required Form PF data on behalf of filers, among other concerns over service providers' completing Form PF, may not be justified. Wulf A. Kaal, Private Fund Disclosures Under the Dodd-Frank Act (2014). SSRN: https://ssrn.com/abstract=2447306 - [2447306-035](https://wulfkaal.github.io/claims/2447306-035) [failure/evidenced] *(failure mode)* -- Working with a service provider imposes its own costs: filers reported that the arrangement requires investing time and money to develop interaction processes and bearing the burden of supplying the provider with the underlying information. > Commenters identified several challenges in working with a service-provider, including the investment of time and expenses to develop processes, and the burden of providing service-providers with the required information. Wulf A. Kaal, Private Fund Disclosures Under the Dodd-Frank Act (2014). SSRN: https://ssrn.com/abstract=2447306 - [2447306-036](https://wulfkaal.github.io/claims/2447306-036) [empirical/evidenced] -- Investor demand for Form PF filings is limited: 74.47 percent of respondents had never been asked by an investor for a copy of their Form PF filing. > Figure 38 shows that a majority of respondents (74.47%) in the sample have not been asked by their investors to provide a copy of their Form PF filing. Wulf A. Kaal, Private Fund Disclosures Under the Dodd-Frank Act (2014). SSRN: https://ssrn.com/abstract=2447306 - [2447306-037](https://wulfkaal.github.io/claims/2447306-037) [failure/evidenced] *(failure mode)* -- Form PF fund performance metrics are not accurate or comparable across filers, because reporting entities employ different calculation methodologies to produce them. > Several respondents mentioned Form PF Item C., Question 17 (Reporting Fund Performance), suggesting that existing Form PF fund performance metrics are not accurate because the reporting entities employ different calculation methodologies. Wulf A. Kaal, Private Fund Disclosures Under the Dodd-Frank Act (2014). SSRN: https://ssrn.com/abstract=2447306 - [2447306-039](https://wulfkaal.github.io/claims/2447306-039) [empirical/evidenced] -- The measured effect of Form PF data reporting on the private fund industry is milder than the pre-adoption debate predicted. > The findings of this study suggest that the overall effect of Form PF data reporting requirements on the private fund industry may be less severe than widely expected. Wulf A. Kaal, Private Fund Disclosures Under the Dodd-Frank Act (2014). SSRN: https://ssrn.com/abstract=2447306 - [2447306-040](https://wulfkaal.github.io/claims/2447306-040) [empirical/argued] -- On the cost evidence collected here for both smaller and larger advisers, the industry's long standing objection that mandatory registration and disclosure would inappropriately burden investment advisers is mostly unfounded. > the industry's concerns that mandatory private fund adviser registration and disclosure requirements could inappropriately burden investment advisers59 seem to be mostly unfounded. Wulf A. Kaal, Private Fund Disclosures Under the Dodd-Frank Act (2014). SSRN: https://ssrn.com/abstract=2447306 - [2447306-041](https://wulfkaal.github.io/claims/2447306-041) [predictive/speculative] -- Most of the identified problems with Form PF are self correcting over time, as the SEC issues additional and improved guidance or revises the core questions and definitions that filers flagged as problematic. > Most of the problems may be addressed over time as the SEC provides additional and improved guidance on Form PF or revises core questions and/or definitions pertaining to core questions that have been identified as problematic. Wulf A. Kaal, Private Fund Disclosures Under the Dodd-Frank Act (2014). SSRN: https://ssrn.com/abstract=2447306 - [2447306-042](https://wulfkaal.github.io/claims/2447306-042) [design/argued] -- Standardizing private fund adviser reporting obligations is the author's proposed remedy for the shortcomings advisers identified, because standardization attacks the ambiguity and inefficiency in the reporting requirements at their source and simplifies the disclosure regime. > Standardization may help address the ambiguities and inefficiencies that currently exist in the reporting requirements and help simplify and streamline the disclosure requirements for the private fund industry. Wulf A. Kaal, Private Fund Disclosures Under the Dodd-Frank Act (2014). SSRN: https://ssrn.com/abstract=2447306 - [2447306-043](https://wulfkaal.github.io/claims/2447306-043) [design/argued] -- A single standardized reporting model will not suffice: because different types of private fund advisers have competing needs, policy makers should evaluate several different models for standardizing Form PF reporting. > To adequately address the competing needs of different types of private fund advisers, policy-makers should consider different models for standardization of Form PF reporting requirements. Wulf A. Kaal, Private Fund Disclosures Under the Dodd-Frank Act (2014). SSRN: https://ssrn.com/abstract=2447306 - [2447306-044](https://wulfkaal.github.io/claims/2447306-044) [empirical/asserted] *(failure mode)* -- The study's cost findings are bounded to the short run: the data cannot establish what it will cost the private fund industry to keep completing and filing Form PF annually or quarterly over time. > The data does not identify the long-term costs for the private fund industry of having to complete and file Form PF on an annual or quarterly basis. Wulf A. Kaal, Private Fund Disclosures Under the Dodd-Frank Act (2014). SSRN: https://ssrn.com/abstract=2447306 - [2470008-001](https://wulfkaal.github.io/claims/2470008-001) [failure/argued] *(failure mode)* -- The SEC data collected from private fund advisers feeds every stage of the FSOC's systemic risk assessment, and the FSOC leans most heavily on precisely those disclosure items that are the most problematic. > The author shows that while the SEC's data plays a crucial role in all stages of FSOC's systemic risk assessment of private fund advisers, the FSOC relies most heavily on some of the most problematic disclosure items collected by the SEC. Wulf A. Kaal, The Systemic Risk of Private Funds after the Dodd-Frank Act (2014). SSRN: https://ssrn.com/abstract=2470008 - [2470008-002](https://wulfkaal.github.io/claims/2470008-002) [failure/argued] *(failure mode)* -- Accuracy and consistency problems in the SEC's private fund data collection can impair the FSOC's ability to evaluate the systemic risk posed by private fund advisers. > Evidence that the SEC's data collection encounters accuracy and consistency problems might hamper the FSOC's ability to evaluate the systemic risk of private fund advisers. Wulf A. Kaal, The Systemic Risk of Private Funds after the Dodd-Frank Act (2014). SSRN: https://ssrn.com/abstract=2470008 - [2470008-003](https://wulfkaal.github.io/claims/2470008-003) [empirical/evidenced] *(failure mode)* -- Prior studies and anecdotal evidence indicate that the data collection mandated by Form PF could itself create problems for the FSOC when it evaluates hedge fund systemic risk. > Several observations from previous studies and anecdotal evidence suggest that the mandated data collection in Form PF could create issues for FSOC in evaluating the systemic risk of hedge funds. Wulf A. Kaal, The Systemic Risk of Private Funds after the Dodd-Frank Act (2014). SSRN: https://ssrn.com/abstract=2470008 - [2470008-004](https://wulfkaal.github.io/claims/2470008-004) [failure/evidenced] *(failure mode)* -- Even though the private fund industry broadly accepted Form PF, the form's core problems for the SEC are the ambiguity of several questions, advisers' disagreement with the definition of funds, and correspondingly insufficient SEC guidance. > the core challenges for the SEC in Form PF include: the ambiguity of several questions on Form PF, private fund advisers' disagreement with the definition of funds in Form PF and corresponding insufficiency of SEC guidance Wulf A. Kaal, The Systemic Risk of Private Funds after the Dodd-Frank Act (2014). SSRN: https://ssrn.com/abstract=2470008 - [2470008-014](https://wulfkaal.github.io/claims/2470008-014) [design/argued] -- Form PF data was tailored primarily for the FSOC rather than for the SEC's own purposes, a design choice that shaped the level of reporting required. > The data collected via Form PF has been tailored primarily for the use of the FSOC. Wulf A. Kaal, The Systemic Risk of Private Funds after the Dodd-Frank Act (2014). SSRN: https://ssrn.com/abstract=2470008 - [2470008-020](https://wulfkaal.github.io/claims/2470008-020) [mechanism/argued] -- The FSOC's three stage SIFI review process depends heavily on information that private fund investment advisers supply through Form PF. > FSOC's three-stage review process for SIFI designation153 depends heavily on the information provided by private fund investment advisers in Form PF. Wulf A. Kaal, The Systemic Risk of Private Funds after the Dodd-Frank Act (2014). SSRN: https://ssrn.com/abstract=2470008 - [2470008-021](https://wulfkaal.github.io/claims/2470008-021) [mechanism/argued] -- Form PF information addresses most of the FSOC's stage one thresholds either directly or indirectly, so the mechanical screen runs largely on adviser reported data. > The information in Form PF either directly or indirectly addresses most of FSOC's stage one thresholds. Wulf A. Kaal, The Systemic Risk of Private Funds after the Dodd-Frank Act (2014). SSRN: https://ssrn.com/abstract=2470008 - [2470008-022](https://wulfkaal.github.io/claims/2470008-022) [failure/evidenced] *(failure mode)* -- The SEC itself reports that the consistency of investment advisers' responses on Form PF is not ensured and may be questionable. > The analysis of the data collected in Form PF presents several key challenges. The SEC suggests that the consistency of investment adviser's responses on Form PF is not ensured and could be questionable. Wulf A. Kaal, The Systemic Risk of Private Funds after the Dodd-Frank Act (2014). SSRN: https://ssrn.com/abstract=2470008 - [2470008-023](https://wulfkaal.github.io/claims/2470008-023) [failure/evidenced] *(failure mode)* -- Advisers take different approaches and make different assumptions when completing Form PF, which the SEC identifies as a further challenge to the usability of the data. > Other challenges with Form PF identified by the SEC include the differences in approaches taken by investment advisers in completing Form PF and differences in assumptions made by investment advisers in completing Form PF. Wulf A. Kaal, The Systemic Risk of Private Funds after the Dodd-Frank Act (2014). SSRN: https://ssrn.com/abstract=2470008 - [2470008-024](https://wulfkaal.github.io/claims/2470008-024) [empirical/evidenced] *(failure mode)* -- The SEC's initial analysis of Form PF data turned up anomalies attributed to filer error, which prompted SEC concern about the quality of the information private fund advisers report. > Upon initial analysis of Form PF data, the SEC identified data anomalies deemed to be attributable to filer error165 which precipitated SEC concerns about the quality of the information provided by private fund advisers. Wulf A. Kaal, The Systemic Risk of Private Funds after the Dodd-Frank Act (2014). SSRN: https://ssrn.com/abstract=2470008 - [2470008-025](https://wulfkaal.github.io/claims/2470008-025) [failure/argued] *(failure mode)* -- Expanding the uses of Form PF data remains difficult so long as there is insufficient confidence in the accuracy of what advisers report, notwithstanding SEC efforts to improve quality through interpretive FAQs and curative amendments. > expanding the utility of Form PF data without sufficient confidence in the accuracy of the information provided by investment advisers on Form PF remains difficult Wulf A. Kaal, The Systemic Risk of Private Funds after the Dodd-Frank Act (2014). SSRN: https://ssrn.com/abstract=2470008 - [2470008-026](https://wulfkaal.github.io/claims/2470008-026) [predictive/speculative] -- Form PF data quality and utility are likely to improve over time as filers grow familiar with the form's requirements and calculation methods, because the SEC's experience with the data is still early. > On the upside, the SEC's experience with Form PF data is in its early stages and the data quality and utility is likely to evolve over time as filers become more familiar with the requirements of Form PF and the methods of calculation. Wulf A. Kaal, The Systemic Risk of Private Funds after the Dodd-Frank Act (2014). SSRN: https://ssrn.com/abstract=2470008 - [2470008-028](https://wulfkaal.github.io/claims/2470008-028) [failure/evidenced] *(failure mode)* -- The substantive defects in Form PF data are the ambiguity of several key questions, inaccurate definitions paired with insufficient SEC guidance, and difficulty aggregating the required information. > Core substantive issues with Form PF include: the ambiguity of several key questions on Form PF, the inaccuracy of Form PF definitions and corresponding insufficiency of SEC guidance for Form PF, and difficulties in aggregating the required Form PF information. Wulf A. Kaal, The Systemic Risk of Private Funds after the Dodd-Frank Act (2014). SSRN: https://ssrn.com/abstract=2470008 - [2470008-029](https://wulfkaal.github.io/claims/2470008-029) [empirical/evidenced] *(failure mode)* -- More than forty percent of respondents in a prior study disagreed with the definitions or instructions in Form PF. > Over forty percent of respondents in a prior study suggested that they disagreed with definitions or instructions in Form PF. Wulf A. Kaal, The Systemic Risk of Private Funds after the Dodd-Frank Act (2014). SSRN: https://ssrn.com/abstract=2470008 - [2470008-030](https://wulfkaal.github.io/claims/2470008-030) [failure/evidenced] *(failure mode)* -- The Form PF definition of Regulatory Assets under Management is the leading example of a definition that forced filers to interpret what they were required to report. > Especially the definition of Regulatory Assets under Management (RAUM), as required by Form PF, required filers to interpret what they were required to report. Wulf A. Kaal, The Systemic Risk of Private Funds after the Dodd-Frank Act (2014). SSRN: https://ssrn.com/abstract=2470008 - [2470008-031](https://wulfkaal.github.io/claims/2470008-031) [failure/evidenced] *(failure mode)* -- The interpretation Form PF demands generated particular concern among filers about the definition of counterparties and about counterparty performance measures. > The level of interpretation required to answer Form PF precipitated particular concerns among filers pertaining to the definition of counterparties and performance measures for counterparties in Form PF. Wulf A. Kaal, The Systemic Risk of Private Funds after the Dodd-Frank Act (2014). SSRN: https://ssrn.com/abstract=2470008 - [2470008-032](https://wulfkaal.github.io/claims/2470008-032) [design/argued] -- Form PF instructions need clarification and its definitions, including those for RAUM and AUM, need improvement, since there is evidence that questions and definitions had to be optimized. > There is also evidence that Form PF questions and definitions had to be optimized, including performance information required by Form PF.177 Form PF instructions generally needs clarification and the definitions for RAUM/AUM in Form PF, among others, have to be improved. Wulf A. Kaal, The Systemic Risk of Private Funds after the Dodd-Frank Act (2014). SSRN: https://ssrn.com/abstract=2470008 - [2470008-033](https://wulfkaal.github.io/claims/2470008-033) [failure/argued] *(failure mode)* -- Because several core Form PF questions feeding the FSOC's stage one threshold screen are themselves defective, the FSOC's systemic risk assessment process could be compromised. > Given the identified shortcomings of Form PF data, the systemic risk assessment process employed by the FSOC could be compromised. Several core Form PF questions that provide specific information for FSOC's stage one threshold assessment encounter problems. Wulf A. Kaal, The Systemic Risk of Private Funds after the Dodd-Frank Act (2014). SSRN: https://ssrn.com/abstract=2470008 - [2470008-034](https://wulfkaal.github.io/claims/2470008-034) [failure/argued] *(failure mode)* -- Because the FSOC uses RAUM related valuations directly and indirectly to set stage one thresholds, and because RAUM requires substantial filer interpretation, it is questionable whether the FSOC can use that Form PF data effectively and sustainably for systemic risk evaluations and SIFI designations. > it seems at least questionable if FSOC will be able to use the related Form PF data effectively and sustainably for its systemic risk evaluations and the designation of non-bank financial companies as systemically risky Wulf A. Kaal, The Systemic Risk of Private Funds after the Dodd-Frank Act (2014). SSRN: https://ssrn.com/abstract=2470008 - [2470008-035](https://wulfkaal.github.io/claims/2470008-035) [failure/argued] *(failure mode)* -- The Form PF counterparty questions most affected by filer interpretation, Questions 22 and 23, are the very ones the FSOC uses in stage two to determine the interconnectedness of private funds. > Form PF questions 22 and 23 are directly used in FSOC's stage two analysis to determine the interconnectedness of private funds. Wulf A. Kaal, The Systemic Risk of Private Funds after the Dodd-Frank Act (2014). SSRN: https://ssrn.com/abstract=2470008 - [2470008-036](https://wulfkaal.github.io/claims/2470008-036) [mechanism/argued] *(failure mode)* -- Widespread filer disagreement with Form PF definitions implies that a large share of filers are uncertain how to answer, which raises the possibility that they complete the form with estimates and varied assumptions. > This suggests that a large proportion of filers are uncertain as to how Form PF questions are to be answered. This uncertainty at least raises the possibility that the filers are using estimates and a variety of assumptions to complete Form PF. Wulf A. Kaal, The Systemic Risk of Private Funds after the Dodd-Frank Act (2014). SSRN: https://ssrn.com/abstract=2470008 - [2470008-037](https://wulfkaal.github.io/claims/2470008-037) [condition/argued] *(failure mode)* -- If the FSOC relies on inaccurate Form PF data in its systemic risk assessment, its work on private funds may itself be erroneous. > If FSOC relies on Form PF data in its systemic risk assessment that is subject to inaccuracies, it appears possible that FSOC's work pertaining to private funds could in turn be subject to errors. Wulf A. Kaal, The Systemic Risk of Private Funds after the Dodd-Frank Act (2014). SSRN: https://ssrn.com/abstract=2470008 - [2470008-038](https://wulfkaal.github.io/claims/2470008-038) [failure/argued] *(failure mode)* -- Private fund advisers reporting under Form PF encountered issues that could affect the FSOC's systemic risk assessment, but the author does not claim that the FSOC is unable to fulfill its congressional mandate. > The article suggests that private fund advisers who reported data as required by SEC Form PF encountered issues that could affect FSOC's systemic risk assessment of private funds. The author does not suggest that the FSOC is unable to fulfill Congress's mandate. Wulf A. Kaal, The Systemic Risk of Private Funds after the Dodd-Frank Act (2014). SSRN: https://ssrn.com/abstract=2470008 - [2470008-039](https://wulfkaal.github.io/claims/2470008-039) [failure/argued] *(failure mode)* -- Matching the identified Form PF defects against the FSOC's specific uses of that data suggests possible inaccuracies in the FSOC's systemic risk assessment process, although the author disclaims scientific or empirical precision for the analysis. > The matching of identified Form PF issues with FSOC's respective use of such suboptimal Form PF data suggests that possible inaccuracies may exist in FSOC's systemic risk assessment process. The author does not claim scientific and/or empirical precision in the analysis. Wulf A. Kaal, The Systemic Risk of Private Funds after the Dodd-Frank Act (2014). SSRN: https://ssrn.com/abstract=2470008 - [2470008-040](https://wulfkaal.github.io/claims/2470008-040) [normative/argued] -- Fixing the identified problems with Form PF data would help optimize the FSOC's systemic risk assessment of private funds. > Addressing the identified problems with Form PF data could help optimize FSOC's systemic risk assessment of private funds. Wulf A. Kaal, The Systemic Risk of Private Funds after the Dodd-Frank Act (2014). SSRN: https://ssrn.com/abstract=2470008 **2016** - [2714974-008](https://wulfkaal.github.io/claims/2714974-008) [failure/argued] *(failure mode)* -- Some of the most sensitive Form PF disclosures are not readily obtainable by the funds themselves: counterparty credit exposure often cannot be determined by individual fund managers, which makes the reporting requirement burdensome in practice. > For example, the disclosure of counterparty credit exposure is sensitive information that often cannot readily be determined by the individual fund managers. Kaal and Oesterle, The History of Hedge Fund Regulation in the United States (2016). SSRN: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2714974 - [2714974-009](https://wulfkaal.github.io/claims/2714974-009) [empirical/evidenced] -- Contrary to the hedge fund industry's own predictions, the industry has absorbed Form PF quickly and the impact of the Dodd-Frank registration and disclosure rules has proven much less intense than the industry initially anticipated. > The hedge fund industry seems to be adjusting well to the registration and disclosure requirements under the Dodd-Frank Act, and the impact of the registration and disclosure rules appears to be much less intense than the hedge fund industry initially anticipated. Kaal and Oesterle, The History of Hedge Fund Regulation in the United States (2016). SSRN: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2714974 - [2714974-010](https://wulfkaal.github.io/claims/2714974-010) [empirical/evidenced] -- The majority of hedge fund advisers spent less than $10,000 preparing their initial Form PF data reporting to the SEC, and subsequent annual filings cost about half of that initial amount. > The majority of hedge fund advisers incurred less than $10,000 to prepare their initial data reporting to the SEC, with the cost of subsequent annual Form PF filings at about half the initial cost (Kaal 2014). Kaal and Oesterle, The History of Hedge Fund Regulation in the United States (2016). SSRN: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2714974 - [2714974-011](https://wulfkaal.github.io/claims/2714974-011) [empirical/evidenced] -- Larger hedge fund advisers, which must file Form PF quarterly rather than annually, faced substantially higher compliance costs for both initial and subsequent reporting than smaller advisers did. > faced substantially higher compliance costs, both for their initial data reporting and for subsequent quarterly filings. Kaal and Oesterle, The History of Hedge Fund Regulation in the United States (2016). SSRN: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2714974 - [2714974-012](https://wulfkaal.github.io/claims/2714974-012) [failure/evidenced] *(failure mode)* -- The most pressing problem with Form PF identified by the majority of SEC registered hedge fund advisers is not the volume of data but the ambiguity of the data reporting requirements themselves. > The majority of SEC-registered hedge fund advisers identified the ambiguity of Form PF data reporting requirements as the most pressing issue (Kaal 2016b). Kaal and Oesterle, The History of Hedge Fund Regulation in the United States (2016). SSRN: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2714974 - [2732915-010](https://wulfkaal.github.io/claims/2732915-010) [empirical/argued] -- Form PF raised regulatory oversight of private funds to unprecedented levels by requiring managers to disclose, for the first time, information about themselves, their funds, their investors, performance, financing, risk metrics, strategies, and credit exposure. > increased the level of regulatory oversight of private funds to unprecedented levels. Wulf A. Kaal, The Private Fund Industry Five Years after the Dodd-Frank Act – A Survey Study (2016). SSRN: https://ssrn.com/abstract=2732915 - [2732915-011](https://wulfkaal.github.io/claims/2732915-011) [empirical/argued] -- Prior studies acknowledge that the SEC's mandated collection of private fund data through Form PF created several core challenges for the industry, but they do not sufficiently clarify the long-term impact of the Form PF disclosure requirements. > Although prior studies have acknowledged that the SEC's mandated collection of private fund data via Form PF created several core challenges for the private fund industry, these studies do not sufficiently clarify the long-term impact of the Form PF disclosure requirements. Wulf A. Kaal, The Private Fund Industry Five Years after the Dodd-Frank Act – A Survey Study (2016). SSRN: https://ssrn.com/abstract=2732915 - [2732915-012](https://wulfkaal.github.io/claims/2732915-012) [failure/argued] *(failure mode)* -- Form PF required disclosures of counterparty credit exposure constitute sensitive information that individual fund managers often cannot readily determine, which makes that reporting requirement hard to satisfy. > For instance, Form PF required disclosures of counterparty credit exposure constitute sensitive information that often cannot be readily determined by the individual fund managers. Wulf A. Kaal, The Private Fund Industry Five Years after the Dodd-Frank Act – A Survey Study (2016). SSRN: https://ssrn.com/abstract=2732915 - [2732915-013](https://wulfkaal.github.io/claims/2732915-013) [empirical/evidenced] -- The SEC estimates that 230 U.S. hedge fund advisers with at least $1.5 billion in RAUM attributable to hedge funds at the end of any month in the prior fiscal quarter will file Form PF. > The SEC estimates that 230 U.S. hedge fund advisers with at least $1.5 billion in RAUM attributable to hedge funds at the end of any month in the prior fiscal quarter will file Form PF. Wulf A. Kaal, The Private Fund Industry Five Years after the Dodd-Frank Act – A Survey Study (2016). SSRN: https://ssrn.com/abstract=2732915 - [2732915-014](https://wulfkaal.github.io/claims/2732915-014) [empirical/evidenced] -- Approximately 155 investment advisers managing over $2 billion in private equity fund assets may represent roughly 75 percent of the U.S. private equity fund industry, so a small number of filers covers most industry assets. > Similarly, the approximately 155 investment advisers managing over $2 billion in private equity fund assets may represent roughly 75% of the U.S. private equity fund industry. Wulf A. Kaal, The Private Fund Industry Five Years after the Dodd-Frank Act – A Survey Study (2016). SSRN: https://ssrn.com/abstract=2732915 - [2732915-015](https://wulfkaal.github.io/claims/2732915-015) [empirical/evidenced] -- Form PF data from the SEC Risk and Examinations Office for the fourth quarter of 2014 show net asset value of about $3,399 billion for hedge funds, $2,672 billion for Qualifying Hedge Funds, and $1,744 billion for private equity. > Form PF data provided by the SEC's Risk and Examinations Office for the fourth quarter of 2104 show that the net asset value is around $3,399 billion for hedge funds, $2,672 billion for Qualifying Hedge Funds and $1,744 billion for Private Equity. Wulf A. Kaal, The Private Fund Industry Five Years after the Dodd-Frank Act – A Survey Study (2016). SSRN: https://ssrn.com/abstract=2732915 - [2732915-016](https://wulfkaal.github.io/claims/2732915-016) [empirical/evidenced] -- A 2013 survey found that Form PF compliance costs for first time filers were under $10,000 for 59.18 percent of respondents, while subsequent annual Form PF filings cost no more than $5,000 for 57.14 percent of respondents. > While Form PF compliance costs for first time filers were under $10,000 (59.18% of respondents), the cost of subsequent annual Form PF filings amounted to no more than $5,000 (57.14% of respondents), Wulf A. Kaal, The Private Fund Industry Five Years after the Dodd-Frank Act – A Survey Study (2016). SSRN: https://ssrn.com/abstract=2732915 - [2732915-017](https://wulfkaal.github.io/claims/2732915-017) [empirical/evidenced] -- Industry concerns about the burdensome nature of Title IV's mandatory private fund adviser registration and disclosure requirements appear mostly unfounded, although data inconsistencies remain a concern. > While data inconsistencies appear to be remain as a concerns,63 concerns over the burdensome nature of Title IV's mandatory private fund adviser registration and disclosure requirements64 seem to be mostly unfounded. Wulf A. Kaal, The Private Fund Industry Five Years after the Dodd-Frank Act – A Survey Study (2016). SSRN: https://ssrn.com/abstract=2732915 - [2732915-031](https://wulfkaal.github.io/claims/2732915-031) [empirical/evidenced] -- The largest group of respondents prefers an assets under management size between $500 million and $1 billion, and no clear majority preference emerges around the $1.5 billion Form PF quarterly reporting threshold. > Figure 13 illustrates that the largest number of respondents (33.3%) prefer an AUM size of between $500 million and $1 billion. No clear majority emerges as to the preference pertaining to the $1.5 billion Form PF quarterly reporting threshold for larger funds. Wulf A. Kaal, The Private Fund Industry Five Years after the Dodd-Frank Act – A Survey Study (2016). SSRN: https://ssrn.com/abstract=2732915 - [2732915-032](https://wulfkaal.github.io/claims/2732915-032) [empirical/evidenced] -- A majority of adviser respondents, 66.7 percent, did not take the $1.5 billion Form PF quarterly reporting threshold into account when determining the appropriate assets under management for the funds they manage. > Figure 15 illustrates that the majority of adviser respondents (66.7%) did not take the $1.5 billion AUM threshold under Form PF for quarterly reporting into account in determining the appropriate size of AUM for the fund(s) they manage. Wulf A. Kaal, The Private Fund Industry Five Years after the Dodd-Frank Act – A Survey Study (2016). SSRN: https://ssrn.com/abstract=2732915 - [2739479-003](https://wulfkaal.github.io/claims/2739479-003) [definitional/asserted] -- The reporting obligations imposed on private fund advisers by Form PF raised regulatory oversight of private funds to unprecedented levels. > Reporting obligations on Form PF72 increase the regulatory oversight of pri- vate funds to unprecedented levels. Wulf A. Kaal, The Post Dodd-Frank Act Evolution of the Private Fund Industry Comparative Evidence from 2012 and 2 (2016). SSRN: https://ssrn.com/abstract=2739479 - [2739479-004](https://wulfkaal.github.io/claims/2739479-004) [empirical/evidenced] -- Prior survey evidence indicates that the hedge fund industry adjusted well to the Dodd-Frank registration and disclosure requirements, and that the actual impact of those rules was much less significant than the private fund industry had feared. > In summary, prior surveys suggest that the hedge fund industry seems to be adjusting well to the registration and disclosure requirements of Dodd- Frank. The impact of the registration and disclosure rules appears to be much less significant than feared by the private fund industry. Wulf A. Kaal, The Post Dodd-Frank Act Evolution of the Private Fund Industry Comparative Evidence from 2012 and 2 (2016). SSRN: https://ssrn.com/abstract=2739479 - [2739479-030](https://wulfkaal.github.io/claims/2739479-030) [empirical/evidenced] -- Sensitivity to the Form PF quarterly reporting threshold rose sharply: only 19 percent of 2012 respondents took the $1.5 billion threshold into account, compared with 33 percent in 2015. > In 2012, only 19% of respondents took the Form PF quar- terly threshold into account, whereas 33% of respondents in 2015 found the threshold relevant. Wulf A. Kaal, The Post Dodd-Frank Act Evolution of the Private Fund Industry Comparative Evidence from 2012 and 2 (2016). SSRN: https://ssrn.com/abstract=2739479 - [2739479-031](https://wulfkaal.github.io/claims/2739479-031) [mechanism/argued] -- Because quarterly Form PF filing costs roughly $10,000 per reporting fund, the $1.5 billion threshold that triggers quarterly filing gives advisers a direct cost reason to factor that threshold into the AUM decision. > At an average quarterly cost of around $10,000 for each reporting fund, the Form PF190 costs may make participants more likely to consider the Form PF reporting threshold in the AUM decision. Wulf A. Kaal, The Post Dodd-Frank Act Evolution of the Private Fund Industry Comparative Evidence from 2012 and 2 (2016). SSRN: https://ssrn.com/abstract=2739479 - [2816408-013](https://wulfkaal.github.io/claims/2816408-013) [design/asserted] -- The quarterly Form PF reporting obligation imposed on advisers with more than $1.5 billion in regulatory assets under management attributable to private funds exists to give the FSOC timely data for identifying trends in systemic risk. > The quarterly reporting requirement for large private fund advisers is intended to provide timely data that enables the FSOC to identify trends in systemic risk (IA Release 3308). Wulf A. Kaal, Barbara Luppi, Sandra Paterlini, Did the Dodd-Frank Act Impact Private Fund Performance – Evidence from 2010 – 2015 (2016). SSRN: https://ssrn.com/abstract=2816408 **2017** - [2998097-011](https://wulfkaal.github.io/claims/2998097-011) [definitional/asserted] -- Under PFIARA, private investment fund advisers with more than 150 million dollars of assets under management must register as investment advisers and disclose information about their trades and portfolios to the SEC. > PFIARA mandates private investment fund adviser registration to increase record keeping and disclosure. Under PFIARA, private investment fund advisers with more than $150 million AUM must register as investment advisers and disclose information about their trades and portfolios to the SEC.58 Wulf A. Kaal, Private Investment Fund Regulation - Theory and Empirical Evidence from 1998 to 2016 (2017). SSRN: https://ssrn.com/abstract=2998097 - [2998097-012](https://wulfkaal.github.io/claims/2998097-012) [mechanism/argued] *(failure mode)* -- The private fund industry's central fear about Form PF was not the filing itself but eventual publicity: if the disclosures ever became public, competitors could reverse engineer fund strategies and largely eliminate managers' ability to generate absolute returns. > the industry feared that such information could at some point in the future be made public which would largely eliminate private investment fund managers' ability to make absolute returns for their clients as competitors would be able to reverse engineer their strategies. Apart Wulf A. Kaal, Private Investment Fund Regulation - Theory and Empirical Evidence from 1998 to 2016 (2017). SSRN: https://ssrn.com/abstract=2998097 - [2998097-013](https://wulfkaal.github.io/claims/2998097-013) [failure/argued] *(failure mode)* -- Some Form PF disclosure requirements are not answerable as designed, because counterparty credit exposure is sensitive information that individual private fund managers often cannot readily determine. > For instance, the disclosure of counterparty credit exposure is sensitive information that often cannot readily be determined by the individual private investment fund managers. Wulf A. Kaal, Private Investment Fund Regulation - Theory and Empirical Evidence from 1998 to 2016 (2017). SSRN: https://ssrn.com/abstract=2998097 - [2998097-014](https://wulfkaal.github.io/claims/2998097-014) [failure/argued] *(failure mode)* -- Because advisers and third party service providers can flatten out and sanitize the information disclosed in Forms ADV and PF, the resulting disclosures may be less useful to the FSOC and the SEC in determining the systemic risk posed by private funds. > Although the level of sanitizing of disclosures could not be verified, sanitized disclosures could be less useful for Financial Stability Oversight Council (FSOC) and SEC evaluation and their determination of the systemic risk posed by private funds.84 Wulf A. Kaal, Private Investment Fund Regulation - Theory and Empirical Evidence from 1998 to 2016 (2017). SSRN: https://ssrn.com/abstract=2998097 - [2998097-021](https://wulfkaal.github.io/claims/2998097-021) [failure/evidenced] *(failure mode)* -- The SEC's private fund data collection encountered accuracy and consistency problems that hampered the FSOC's ability to evaluate the systemic risk of private funds. > The paper created and evaluated data evidence that demonstrated that the SEC's data collection encountered accuracy and consistency problems that hampered the FSOC's ability to evaluate the systemic risk of private funds.141 The author Wulf A. Kaal, Private Investment Fund Regulation - Theory and Empirical Evidence from 1998 to 2016 (2017). SSRN: https://ssrn.com/abstract=2998097 - [2998097-022](https://wulfkaal.github.io/claims/2998097-022) [failure/evidenced] *(failure mode)* -- The FSOC relied most heavily on some of the most problematic disclosure items the SEC collects, even though SEC data played a crucial role at every stage of its systemic risk assessment of private funds. > The author showed that while the SEC's data played a crucial role in all stages of FSOC's systemic risk assessment of private funds, the FSOC relied most heavily on some of the most problematic disclosure items collected by the SEC. Wulf A. Kaal, Private Investment Fund Regulation - Theory and Empirical Evidence from 1998 to 2016 (2017). SSRN: https://ssrn.com/abstract=2998097 - [2998097-023](https://wulfkaal.github.io/claims/2998097-023) [failure/evidenced] *(failure mode)* -- Form PF data suffer from core shortcomings: ambiguity in several key questions, inaccurate definitions with correspondingly insufficient SEC guidance, and difficulty aggregating the required information. > These included: the ambiguity of several key questions on Form PF, the inaccuracy of Form PF definitions and the corresponding insufficiency of SEC guidance for Form PF, and difficulties in aggregating the required Form PF information. Wulf A. Kaal, Private Investment Fund Regulation - Theory and Empirical Evidence from 1998 to 2016 (2017). SSRN: https://ssrn.com/abstract=2998097 - [2998097-024](https://wulfkaal.github.io/claims/2998097-024) [failure/argued] *(failure mode)* -- Several core Form PF questions that feed the FSOC's stage one threshold assessment are defective, most importantly because the definition of RAUM required substantive interpretation by the filers themselves. > Several core Form PF questions that provide specific information for FSOC's stage one threshold assessment encounter problems. More specifically, the definition of RAUM required substantive interpretation by filers. Wulf A. Kaal, Private Investment Fund Regulation - Theory and Empirical Evidence from 1998 to 2016 (2017). SSRN: https://ssrn.com/abstract=2998097 - [2998097-025](https://wulfkaal.github.io/claims/2998097-025) [failure/argued] *(failure mode)* -- If the FSOC relies on Form PF data that is subject to inaccuracies, because uncertain filers complete the form using estimates and assumptions, then the FSOC's own work on private funds may in turn be subject to errors. > If FSOC relied on Form PF data in its systemic risk assessment that is subject to inaccuracies, the paper suggested that it appeared possible that FSOC's work pertaining to private funds could in turn be subject to errors.149 Wulf A. Kaal, Private Investment Fund Regulation - Theory and Empirical Evidence from 1998 to 2016 (2017). SSRN: https://ssrn.com/abstract=2998097 ## Verify Every claim above resolves to a record carrying a verbatim source quote, the sha256 of the source PDF, and a preformatted citation. 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