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    Jun. 4, 2026

Proposed Form PF Amendments: Reduced Reporting Requirements for Fund Managers (Part One of Two)

In the first major private fund-related rulemaking since President Trump returned to office, the SEC and CFTC jointly issued proposed amendments (Proposal) to Form PF on April 20, 2026. If adopted in its current form, the Proposal would eliminate filing requirements for certain advisers based on increased reporting thresholds, while streamlining and reducing reporting requirements for many others. The regulators’ goals underlying the Proposal are to reduce the compliance burdens faced by advisers and refocus Form PF on its core purpose: providing data for the monitoring of systemic risks posed by the private funds industry. This article, the first in a two-part series, summarizes the various changes to Form PF outlined in the Proposal and offers analysis from legal experts about its potential impact on hedge and private equity funds. The second article will provide detailed consideration of the revisions that are most applicable to large hedge fund managers. See “Division of Investment Management Staff Discuss Staffing, Operations, Rulemaking and Other Developments” (Jul. 31, 2025).

OFAC Warns of Growing Use of Sham Transactions in Sanctions Evasion and Identifies Red Flags

On March 31, 2026, the Office of Foreign Assets Control of the U.S. Department of the Treasury issued a sanctions advisory (Advisory) calling attention to the growing dangers of sham transactions, whereby sanctioned persons or organizations use proxies and other surrogates to engage in transactions or make arrangements on their behalf, thereby evading sanctions and doing business behind a veneer of legality. The Advisory highlights the severe risks to national security and foreign policy that sham transactions pose and enumerates red flags to be aware of when vetting prospective investors or counterparties and reviewing existing relationships. This article summarizes the Advisory; details the red flags; considers the relative dangers facing hedge funds and private equity funds, respectively; assesses the utility of the so-called “50-Percent Rule” in sanctions compliance; and presents practical compliance takeaways for fund managers from legal experts. See “SEC Risk Alert Highlights Continuing Broker-Dealer AML Shortcomings” (Sep. 28, 2023).

Preparing for SFDR 2.0: European Commission Proposes to Overhaul the E.U.’s ESG Regime

The E.U. Sustainable Finance Disclosure Regulations (SFDR) set forth a disclosure framework for funds based on whether and how they seek to engage in sustainable investing or consider environmental, social and governance factors in the investment process. Since the SFDR took effect in 2021, the number of funds launched that satisfy its requirements has continued to grow each year. On November 20, 2025, the European Commission issued a proposal to substantially revise the SFDR (Proposal). If adopted, the Proposal would eliminate certain entity-level requirements; replace the current Article 9 approach, which is tied to the definition of “sustainable investment,” with exclusion-based criteria; add a new category for funds with transition-related objectives; and make other product-level changes. A Linklaters program examined the key elements of the Proposal, which the speakers referred to as “SFDR 2.0,” and how it would change the existing SFDR regime. The program featured Linklaters partner Raza Naeem, managing associate Clare Wiles and counsel Julia Vergauwen. This article parses their insights and the relevant provisions of the Proposal, including key differences between the Proposal and an earlier, leaked version. See “Key Developments & Considerations in ESG Regulations for Asset Managers Navigating Global Compliance Duties” (May 23, 2024).

The SEC’s Growing Focus on Retailization, AI, Cybersecurity and Private Credit

A wave of developments at the SEC, including public speeches in favor of deregulation; guidance on cybersecurity and closed-end funds investing in private funds; and the agency’s invitation of comments on adding private credit reporting to Form PF, are rich with implications for private fund managers. The current zeitgeist heavily favors broadening retail investor access to private funds and encouraging technological innovation in ways scarcely envisioned under prior administrations. At the same time, the agency maintains a firm stance on the need to tailor compliance programs for cybersecurity preparedness and to adopt best practices around artificial intelligence, retailization and private credit. All those points came across in a May 2026 media roundtable held by ACA Group, which featured Patrick Olson, vice chairman; Carlo di Florio, president; Aaron Pinnick, senior manager of thought leadership; Christine Tetherly-Lewis, partner and head of cybersecurity and the risk advisory division; and Nikolay Kojuharov, partner in product developments. This article summarizes key takeaways from their discussion. See “New Guiding Principles and Priorities of the SEC Enforcement Division” (Apr. 9, 2026).

Risk and Compliance Survey Highlights the Role of Compliance in AI Governance

Each year, NAVEX, in cooperation with The Harris Poll, conducts a benchmarking study of the state of risk and compliance programs. Its 2025 State of Risk & Compliance Report (Survey) is based on responses from nearly 1,000 survey participants. The results indicate that compliance programs continue to mature but with the remit of the compliance team expanding to encompass artificial intelligence (AI) governance and other topics as enforcement priorities evolve and change. The Survey covered compliance program structure and maturity; compliance concerns and incidents; impact of changing enforcement priorities; internal reporting and whistleblowers; compliance training; compliance governance; the intersection of risk management and compliance; third-party oversight; and compliance issues associated with widespread use of AI. This article synthesizes the Survey findings and the insights offered during a related webinar hosted by NAVEX discussing the report. See “Benchmarking AI Uptake by Compliance Functions” (Dec. 4, 2025).

Aron Estaver Returns to Arnold & Porter in San Francisco

Arnold & Porter announced that Aron Estaver has rejoined the investment management team of the corporate and finance practice as a partner, based in the firm’s San Francisco office. Estaver’s practice focuses on advising U.S. and non-U.S. fund managers regarding the structuring and ongoing operations of private investment funds pursuing a broad range of investment strategies, including hedge, private equity, real estate, infrastructure, venture capital and credit. He also regularly represents U.S. and non-U.S. institutional investors, funds of funds, sovereign wealth funds, family offices and high-net-worth investors regarding their private fund investments. For coverage of another addition to Arnold & Porter, see “Michael Saarinen Joins Arnold & Porter As Co‑Lead of Investment Management Group” (Oct. 23, 2025).

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