SEC Proposed Rule Will Require Private Funds To Report Certain Cyber Events

On January 26, 2022, the U.S. Securities and Exchange Commission (SEC) proposed new rules to enhance hedge fund and private fund disclosure requirements and increase regulators' visibility into the private funds industry.

The proposed rules would amend the SEC's Form PF, the confidential reporting form by which private funds disclose regulatory assets to the SEC, in an effort to provide regulators with information to better monitor systemic risks to the private markets as a result of the significant growth and complexity of the private fund industry, according to the SEC.

Among the proposed changes to Form PF would require private funds to disclose cybersecurity events that cause a "significant disruption or degradation" of the entity's "key operations" to the SEC within one business day. Proposed section 5, Item H would require the entity to provide specific information about the event in its report, including the date of occurrence and date of discovery, along