SEC and CFTC Propose Raising Private Fund Reporting Threshold to $1 Billion, Halving Filers

A proposed regulatory overhaul will exempt approximately 50% of current private fund advisers from filing Form PF, eliminating a major compliance burden for mid-sized firms while retaining visibility over 94% of the industry's gross assets. For over a decade, the SEC and CFTC have used Form PF as a massive dragnet to monitor systemic risk, but that dragnet caught thousands of smaller advisers, imposing heavy costs for data that regulators arguably didn't need.[6]

Now, the regulatory pendulum is swinging back. On April 20, 2026, the SEC and CFTC jointly proposed sweeping amendments to Form PF that would drastically raise the reporting thresholds, resolving the tension between systemic risk monitoring and operational friction.[1][2]

The proposal marks a sharp reversal from the regulatory expansion seen between 2021 and 2024, reflecting a new mandate under the Atkins-led SEC to reduce compliance burdens and streamline capital formation.[4]

To understand the stakes, one must look at the mechanics of Form PF. Created in 2011 in the wake of the 2008 financial crisis, the confidential form was designed to give the Financial Stability Oversight Council (FSOC) a clear view into the opaque world of private equity, hedge funds, and liquidity funds.[1][6]

Advisers report granular data on portfolio exposures, leverage, counterparty risk, and liquidity. This data allows regulators to spot dangerous concentrations of risk before they threaten the broader financial system.[3]

However, the definition of who needed to report had remained relatively low. Under the current rules, any SEC-registered adviser with at least $150 million in private fund assets under management (AUM) is required to file.[4][5]

The new proposal would increase that baseline threshold by nearly seven times, pushing it to $1 billion in private fund AUM.[1][2]

The agencies project that this single change will eliminate the Form PF filing obligation for roughly half of all current filers, providing immediate operational relief to smaller and mid-sized advisory firms.[3][5]

Crucially, the SEC and CFTC argue that this massive cut in the filer population will not blind the FSOC. Because private market wealth is heavily concentrated at the top, removing 50% of the filers will only reduce the aggregate private fund gross asset value reported by about 6%—leaving 94% of the industry's assets still under the regulatory microscope.[1][3]

The relief extends further up the chain to hedge funds. The proposal raises the threshold for "large hedge fund advisers"—a designation that triggers rigorous quarterly filing requirements—from $1.5 billion to $10 billion in hedge fund AUM.[2][4]

This adjustment is expected to reduce the number of large hedge fund adviser filers by roughly 65%. Those falling between $1.5 billion and $10 billion will shift to a much lighter annual reporting schedule.[3][5]

The proposal also takes an axe to specific reporting requirements that the industry has long criticized as overly prescriptive. For private equity funds, the agencies proposed eliminating Section 6 quarterly event reporting entirely, which currently mandates disclosures on adviser-led secondary transactions and general partner removals.[4][5]

Additionally, granular questions regarding monthly asset turnover, reference asset exposure, and complex look-through mechanics for indirect exposures would be streamlined or replaced with a "reasonable estimates" standard.[5]

The rollback is not happening in a vacuum. It follows a January 2025 Presidential Memorandum that directed federal agencies to review, delay, or postpone the effective dates of rules that had not yet taken effect.[1]

The SEC had previously adopted expansive Form PF amendments in early 2024, but the compliance dates for those rules had been repeatedly delayed, most recently to October 1, 2026. This new proposal effectively unwinds much of that 2024 framework before it ever goes live.[1][5]

Despite the sweeping cuts, the proposal is not a total retreat from private fund oversight. The thresholds for large private equity fund advisers ($2 billion) and large liquidity fund advisers ($1 billion) remain completely unchanged.[3][5]

Furthermore, advisers that still qualify as large hedge funds under the new $10 billion threshold will continue to face strict 72-hour current reporting deadlines for major stress events, alongside revised counterparty exposure reporting.[5]

The transition timeline remains a critical variable. The proposal suggests a minimum 12-month transition period after a final rule is published. With the public comment period closing in late June 2026, compliance teams are left navigating a complex interim period.[2][5]

If the agencies cannot finalize the new, lighter framework before the October 2026 compliance date of the old, heavier rules, mid-sized advisers may be forced to build compliance systems for regulations that are slated for demolition.[2]

Ultimately, the $1 billion threshold proposal represents a calculated bet by the SEC and CFTC: that systemic risk in the 2020s is driven by the titans of private capital, and that freeing mid-sized funds from the FSOC's dragnet will spur market efficiency without sacrificing financial stability.[6]