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    Jun. 18, 2026

Compliance Corner Q3‑2026: Regulatory Filings and Other Considerations Hedge Fund Managers Should Note in the Coming Quarter

This installment of the Hedge Fund Law Report’s quarterly compliance update highlights upcoming filing deadlines and reporting requirements fund managers should be aware of during the third quarter of 2026. This guest article by ACA Group consultants Jeremy Heckerling, Elli Kavros and Ken Carroll also includes information on the changes to Form PF proposed in April 2026; the SEC’s focus on illiquid assets, artificial intelligence and prediction markets; and an enforcement action involving cherry picking. For more from ACA Group, see “The SEC’s Growing Focus on Retailization, AI, Cybersecurity and Private Credit” (Jun. 4, 2026).

Proposed Form PF Amendments: Specific Elements Impacting Hedge Fund Managers (Part Two of Two)

Over the last few years, the SEC has rolled out multiple rounds of amendments to Form PF that iteratively expanded the reporting obligations of – and corresponding compliance burden on – hedge fund managers. Operating under new leadership, however, the SEC and CFTC have backtracked and issued proposed amendments (Proposal) that would, if adopted in their current form, reduce the number of advisers required to file Form PF and, for those still obligated to file, the number of reporting requirements. When considered in their totality, the revisions reflected in the Proposal have the most significant impact on the reporting obligations of hedge fund managers, although a number of changes specifically impact private equity and other closed-end fund managers. In addition, the Proposal requests industry comments on whether to include information reporting for private credit funds. This article, the second in a two-part series, provides detailed consideration of the revisions that are most applicable to large hedge fund managers. The first article offered a high-level overview of the various changes to Form PF outlined in the Proposal, along with analysis from legal experts abouts its potential impact on the private funds industry. See “Division of Investment Management Staff Discuss Staffing, Operations, Rulemaking and Other Developments” (Jul. 31, 2025).

SMAs and Multi‑Manager Platforms: Registration, Compliance and Aggregation Issues for Outside Managers

When a hedge fund manager takes on a separately managed account (SMA) for a multi-manager platform, the regulatory framework that governs its business changes in ways the manager may not anticipate. For example, there is a risk that the private fund adviser exemption that a standalone fund manager might be relying on could fall away and that the state registration obligations that federal preemption had kept dormant could become active. Positions managed for the SMA may need to be aggregated with the platform’s other holdings for purposes of Sections 13(d), 13(g) and 16 of the Securities Exchange Act of 1934, Regulation SHO and Rule 105 under Regulation M. In addition, the compliance program the manager maintained for its own funds may not satisfy the investor’s expectations. Those issues, along with the practical mechanics of constructing information barriers, negotiating allocation agreements and managing trading surveillance, were the subject of a May 6, 2026, webinar hosted by Akin and Optima Partners. The panel, which was moderated by Akin partner Max Karpel, featured Jonathan Saxton, founder and CEO of Optima Partners; Adam Reback, partner at Optima Partners; and Jason Daniel, partner at Akin. This article summarizes the key takeaways. See “The Evolving Use of Managed Account Platforms and Platform Providers” (Nov. 11, 2021); and “Multi-Manager Hedge Funds: Structuring, Fees, Manager Compensation, Marketing, Risk Management and Performance Measurement” (May 2, 2014).

Broker-Dealer to Pay $75 Million in Fines for AML Program Violations

A broker-dealer has agreed to pay an aggregate $75 million to resolve claims by the SEC, the Financial Crimes Enforcement Network of the U.S. Department of the Treasury (FinCEN) and FINRA that the firm violated the anti-money laundering (AML) requirements of the Bank Secrecy Act and the implementing regulations thereunder. The agencies all allege that, over a period of several years, the broker-dealer failed to adopt and maintain an appropriate risk-based AML program; conduct appropriate customer due diligence; investigate suspicious activity; and file at least 150 suspicious activity reports. This article discusses the facts giving rise to the enforcement proceedings and the relevant terms of the SEC settled enforcement order; the FinCEN consent order; and the FINRA letter of acceptance, waiver and consent. See “FinCEN Proposes Pushing Back AML Rules Compliance Date to January 2028” (Oct. 23, 2025).

OFAC Sanctions PE Firm for Indirect Dealings With Investor in Violation of Russia Sanctions

The sanctions regime administered by the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) can pose significant risks for private fund managers, such as private equity (PE) firms, including when sanctions are imposed on an existing investor. In 2018, IPI Partners, LLC (IPI), secured a $50‑million capital commitment from an entity affiliated with Russian billionaire Suleiman Kerimov, whom OFAC subsequently placed on its Specially Designated Nationals and Blocked Persons list. After conducting due diligence and seeking the advice of counsel, IPI determined that Kerimov did not have an interest in the investor entity. Subsequently, OFAC alleged that Kerimov indirectly controlled the entity and that, as a result, IPI had dealt in Kerimov’s property interests in violation of U.S. sanctions. IPI ultimately agreed to pay nearly $11.5 million to settle the matter, according to OFAC’s enforcement release (Release). This article parses the Release, with commentary from Lowenstein Sandler counsel Abbey E. Baker and MoloLamken partner Walter H. Hawes IV. See our three-part series on sanctions compliance: “How Sanctions Regimes Work” (Jun. 16, 2022); “Their Impact on Private Fund Investors and Investments” (Jun. 23, 2022); and “How to Comply With Them” (Jul. 7, 2022).

Cleary Gottlieb Adds Regulatory Partner to D.C. Office

Cleary Gottlieb announced that Gregory T. Larkin joined the firm as a partner in its global funds group based in Washington, D.C. Larkin has extensive experience advising private fund managers and other investment advisers on regulatory, governance and compliance matters focused primarily on Investment Advisers Act of 1940 and Investment Company Act of 1940 matters. For insights from Larkin, see “Options Under the Volcker Rule for Bank Investment in Unaffiliated Private Equity and Hedge Funds” (Mar. 7, 2014).

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