Northern Trust announced today that its hedge fund administration unit, Northern Trust Hedge Fund Services LLC, is actively working with its private fund clients to provide the data necessary for Form PF reporting.
With Northern Trust's single, global platform for operations and flexible data management capabilities, Northern Trust Hedge Fund Services is able to present portfolio and trade information as well as risk data from outside providers in a format suitable for Form PF reporting, a regulatory filing required of hedge funds, private equity and other private funds beginning this year.
"While Form PF presents a new requirement to our private fund clients, the data aggregation and regulatory expertise necessary to file Form PF are core strengths of Northern Trust," said Peter Sanchez, Chief Executive Officer of Northern Trust Hedge Fund Services. "Our hedge fund administration platform has a unique ability to capture trade level detail for equity, fixed income and derivative transactions in a single system that makes it easier for our clients to complete the requirements of Form PF. Moreover, our flexible solution gives clients the ability to choose their risk data provider."
Form PF is a new rule adopted by the Securities and Exchange Commission (SEC) and Commodity Futures Trading Commission (CFTC) requiring private fund advisors to file disclosure data on holdings and risk exposures within their funds. The effective date for the new rules is March 31, 2012. The SEC requires private funds with more than $5 billion in regulatory assets under management on this date to submit their initial filings after the second quarter of 2012. Firms with regulatory assets under management greater than $150 million will be required to file in early 2013.
"We are working closely with a number of clients who must file Form PF this year," says Jeff Boyd, Chief Operating Officer of Northern Trust Hedge Fund Services. "The reporting process is made easier because our trade data capture capabilities let us source the majority of the required detail from within our core books and records - avoiding manual reconciliation between systems."
Private fund clients also must synthesize the holdings data required for Form PF with risk calculations, which are often generated by third parties other than the fund administrator. The SEC will evaluate how risk data provided in Form PF matches risk data supplied to investors, to make sure that risk reporting is consistent across functions.
"For us, it was important that we give our clients flexibility and choice around the sourcing of risk data," said Sanchez. "In many cases our clients are already deeply engaged with a risk data provider. Our approach will help clients complete Form PF with better accuracy and a minimum amount of disruption. Data aggregation and management is one of our great strengths, and our clients appreciate our flexibility in working with them and their other third party providers to develop a solution that works best for them."
Northern Trust is one of the world's leading asset servicing providers, offering global expertise and local specialist services to investment managers and institutional investors in more than 40 countries. Northern Trust's Corporate & Institutional Services business unit is a leading global provider of asset servicing, asset management, and related services to fund managers, sovereign wealth funds, pension funds, foundations, endowments, insurance companies and government funds. Its Global Fund Services business offers a broad array of middle- and back-office solutions customized to meet the needs of investment managers and fund sponsors, allowing clients to build services around their needs while providing the strength and scalability of one of the world's leading financial institutions.