The US Securities and Exchange Commission gave its first glimpse into how Form PF data is being stored and used by various divisions within its organization.
As part of its first annual update on Form PF information gathering, the securities regulator verified that private fund information submitted by large private equity and real estate funds for systemic risk monitoring purposes was being shared with its Office of Compliance Inspections and Examinations (OCIE), the Division of Economic and Risk Analysis (DERA), its Asset Management Unit (AMU) dedicated to private fund enforcement matters and other offices.
“The AMU is working collaboratively with DERA to develop analytic tools to integrate Form PF data into research and due diligence related to investigative work and other enforcement matters,” the report said. DERA will use the information to create data-mining tools capable of detecting aberrational performances and systemic trends, as well as peer analysis.
The SEC declined to comment on specifics.
Meanwhile, the OCIE will use the data for “pre-examination research and due diligence” purposes, the report stated. “Form PF data will provide greater insight into the activities of the fund(s) managed by an adviser and result in better exam scoping and risk identification.”
The OCIE also will collaborate with the DERA to “develop periodic reports that analyze data across a wide spectrum of filers to help identify trends and possible emerging risks in the private fund industry,” the report continued. The SEC said this joint effort will help set its priorities for future examinations and influence its training-related initiatives.
It seems for now that the SEC is still figuring out how to use Form PF data. “…the Commission’s experience with Form PF data is in its early stages and the utility of the data collection will develop as the collective experience with the information evolves,” the report said.
As of May, the agency received data on more than 1,100 real estate funds alone, which collectively represent nearly $300 billion in regulatory assets under management.