Regulatory Overhaul: SEC and CFTC Propose Significant Relief for Private Fund Reporting

WASHINGTON, D.C. — April 20, 2026 — In a major shift toward regulatory efficiency, the U.S. Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) have jointly announced a proposal to overhaul Form PF, the confidential reporting document used to monitor systemic risk within the private fund industry. The proposed amendments represent a concerted effort to prune reporting requirements that regulators now characterize as excessive, signaling a pivot toward a more streamlined oversight framework for investment advisers.

The proposal, which comes after years of industry pushback regarding the high cost of compliance, seeks to recalibrate the reporting thresholds for private funds. By raising the assets under management (AUM) benchmarks required for filing, the agencies aim to exempt smaller advisers while focusing their supervisory lens on the most significant systemic risks.

The Core Proposals: Scaling Back the Burden

The primary objective of the proposed amendments is to optimize the data collection process by removing smaller entities from the reporting cycle and streamlining the data points required from larger firms.

Raising the Thresholds

Under the current regulatory regime, Form PF acts as a vital tool for the Financial Stability Oversight Council (FSOC) to track systemic risk. However, the agencies acknowledged that the existing threshold of $150 million in AUM has swept up a vast number of smaller firms whose data provides limited value for macro-prudential oversight.

The proposal would:

Increase the Filing Threshold: Raise the threshold for Form PF filing from $150 million to $1 billion in private fund assets under management. This change is expected to eliminate filing requirements for nearly 50% of the advisers currently subject to the rule.
Adjust "Large" Hedge Fund Thresholds: Increase the exposure reporting threshold for "large" hedge fund advisers from $1.5 billion to $10 billion in hedge fund assets under management.

Despite these increases, the regulators emphasize that the utility of Form PF will remain intact. The agencies project that they will continue to capture information covering over 90% of total private fund gross assets, ensuring that the FSOC retains a comprehensive view of the market’s systemic footprint.

Identifying Private Credit

A notable addition to the proposal is the introduction of a specific methodology to identify funds active in the private credit market. As private credit has grown into a cornerstone of non-bank lending, regulators have sought more granular data to assess how these instruments impact market stability. By integrating this reporting requirement while simultaneously cutting overall compliance volume, the agencies are attempting a "surgical" approach to data collection: removing the noise of smaller firms to focus on the high-impact growth of the private credit sector.

Chronology of Regulatory Evolution

The history of Form PF is a study in the evolving relationship between private capital and federal oversight.

2011: Following the 2008 financial crisis, the Dodd-Frank Wall Street Reform and Consumer Protection Act mandated the creation of Form PF. The goal was to provide the FSOC with a "data-driven" understanding of how private funds—previously largely opaque—could transmit risk across the broader financial system.
2012–2022: Throughout the decade, the form underwent various iterations. As the private equity and hedge fund sectors expanded, regulators incrementally added data points to the form, leading to what many in the industry described as "regulatory bloat."
2023–2025: Industry groups, including the Managed Funds Association and the Investment Adviser Association, repeatedly petitioned the SEC and CFTC, arguing that the compliance burden disproportionately affected mid-sized firms and drained resources that could be better spent on investment strategy and risk management.
April 20, 2026: The SEC and CFTC issued the current proposal, marking a rare moment of "regulatory rollback" in the post-Dodd-Frank era.

Supporting Data: Compliance Costs and Market Impact

The decision to revise the thresholds is rooted in a cost-benefit analysis conducted by the SEC’s Division of Economic and Risk Analysis. Internal studies suggested that the administrative costs for smaller advisers often outweighed the value of the granular data provided.

The current reporting requirements demand that firms invest heavily in legal, compliance, and technological infrastructure to track and report fund-level and portfolio-level data. For smaller funds, these fixed costs create a barrier to entry, potentially hindering market competition. By lifting the floor to $1 billion, the agencies intend to allow smaller managers to focus their capital on market growth rather than administrative bureaucracy.

Furthermore, the "large" hedge fund threshold increase recognizes the changing scale of the industry. The $10 billion threshold reflects the reality that the largest firms have significantly greater institutional capacity to handle reporting, while those between $1.5 billion and $10 billion have often been "over-regulated" relative to their potential systemic impact.

Official Responses: Reclaiming Balance

The rhetoric surrounding the announcement reflects a deliberate shift in the SEC’s regulatory philosophy under Chairman Paul S. Atkins.

SEC Chairman Paul S. Atkins

"A key pillar of my agenda is restoring balance to disclosure obligations and reducing the cost of compliance wherever possible," Chairman Atkins stated during the announcement. He criticized previous iterations of the rule, noting that they frequently distracted advisers from their "core investment functions" without providing a "commensurate benefit" to the regulators. According to Atkins, the goal is to "rationalize the scope of Form PF requirements" and bring the disclosure regime back into alignment with its original, limited purpose.

CFTC Chairman Michael S. Selig

The CFTC, which co-regulates commodity pool operators, expressed strong alignment with the SEC. Chairman Michael S. Selig emphasized that the move is designed to make the regulatory framework more "agile."

"By raising the filing threshold and streamlining Form PF, we are taking steps to reduce the burdens associated with filing the form," Selig noted. He emphasized the importance of the public comment period, stating, "I look forward to reading the public comments to ensure we get these changes right so that we eliminate unnecessary costs and burdens for filers."

Implications for the Financial Industry

The proposed amendments will have several far-reaching implications for the private fund landscape.

1. Relief for Smaller Managers

The most immediate impact will be the reduction in operational overhead for mid-sized firms. These firms can expect to reallocate budget and personnel away from regulatory reporting and toward research and investor relations. This may improve the competitiveness of smaller firms against the larger, institutionalized managers who have historically been better equipped to handle complex regulatory filings.

2. A Shift in Focus for Large Advisers

While smaller firms see relief, larger hedge fund managers will still face robust reporting requirements. However, the streamlining of the form—intended to remove redundant data points—is expected to improve the quality of the data reported. Regulators are essentially asking for "less but better" information, which could lead to a more efficient interaction between the industry and the agencies.

3. Monitoring Systemic Risk in Private Credit

The new focus on the private credit market suggests that the SEC and CFTC are not abandoning oversight, but rather refining it. By specifically tracking funds active in private credit, the agencies are acknowledging the shift in the financial landscape where traditional bank lending has been partially replaced by private non-bank lenders. This focus is a clear indication that the regulators remain concerned about systemic risk, even as they trim the reporting requirements for the broader fund population.

4. Regulatory Precedent

This move could signal a broader trend in Washington toward re-evaluating the compliance landscape established in the 2010s. If the SEC and CFTC successfully implement these changes without compromising their ability to detect systemic threats, it may embolden other regulatory bodies to conduct similar audits of their reporting requirements.

Conclusion and Next Steps

The proposal marks a significant milestone in the ongoing dialogue between the government and the private fund industry. By pruning the reporting requirements, the SEC and CFTC are attempting to reconcile the need for systemic risk monitoring with the practical realities of operational efficiency.

The text of the proposing release will be published in the Federal Register shortly. The agencies have invited input from all stakeholders, including investors, fund managers, and legal experts. The public comment period will remain open for 60 days following the publication. During this time, the industry will have the opportunity to provide feedback on whether these thresholds are appropriate and whether the proposed streamlining will truly achieve the intended goal of reducing costs without obscuring systemic risks.

As the industry prepares for these changes, the focus remains on the balance between transparency and the functional autonomy of the private fund sector—a balance that this proposal seeks to restore in a more modern, efficient, and targeted fashion.