Hedge fund advisers who have registered with the Securities and Exchange Commission by July 21 have a lot more to worry about than simply filling out Form ADV.

Completing that registration document -- covering ownership, business practices, fees, and any conflicts of interest. -- is just the beginning of meeting the regulator's requirements.

After that comes Form PF, which includes a lot more information about leverage, credit providers, investor concentration, and fund performance. This, in turn, will step up administrative work required of operations executives.

A lot is at stake. The SEC will share information gathered from the forms with the Financial Stability Oversight Council, which now monitors systemic risk.

Advisers to hedge funds with under $1 billion in assets will file a condensed version of Form PF annually while larger advisers will need to complete a longer more detailed version quarterly. In both cases, the SEC wants to know the value of assets under management, the amount of debt being used, counterparty credit risk exposure and performance for each fund.

Just how difficult will it be complete Form PF?

The SEC claims it should take larger hedge funds only 75 hours to prepare Form PF and 35 hours for each subsequent submission. For smaller hedge funds, it should take only 10 hours to prepare Form PF the first time and three hours for each subsequent report.

The SEC is likely underestimating the difficulty. "Hedge funds are about to generate a tremendous amount of data about themselves for the first time and they may not have the information readily available," says Marshall Saffer, chief operating officer for MIK Fund Solutions, a hedge fund software firm in New York. "It is easily a massive project in data management."

The first date to file is as early as the first quarter of 2012, so time is of the essence in preparing. Smaller hedge funds must file 90 days after the end of their fiscal year while quarterly filings are due no later than 15 days after the end of each calendar quarter.

The SEC has said that some or all of the reporting can be outsourced, or if not, will require compliance and IT programmers to develop internal reporting systems.

Here are five of the key aspects of the data process which hedge fund advisers need to shore up to complete Form PF accurately.

1. What data is required?

The type of data depends on the size of the hedge fund. Smaller hedge fund advisers would report only basic information on leverage, credit providers, strategy and performance, and counterparty credit risk.

Larger hedge fund advisers need to report on an aggregate basis information related to exposures by asset class, geographic concentration and turnover. In addition, for each hedge fund having a net asset value of at least $500 million, advisers must provide details on that fund’s investments, leverage, risk profile and liquidity. For smaller funds, results of stress testing must be provided annually while larger fund managers must do so quarterly.

2. Where is the data located?

The hedge fund adviser needs to track down which systems provide which type of data.

“Small and large hedge funds will likely store transactional data with either their administrator or internal accounting system, but data related to calculating counterparty or market exposure will likely be stored either in an internal risk management platform or an excel spreadsheet,” says Saffer. “Whatever data the fund obtains from its administrator must also be augmented and reformatted to comply with Form PF.”

Case in point: the data is the fund administrator will provide is likely be at the tax lot or position level. By contrast, Form PF will ask what are the long and short market value amounts which can only be figured out if the data at the holdings level is tagged correctly, says Saffer.

3. When is the data collected?

The adviser will need to determine when it can collect each type of data so that it can meet the timetable required by the SEC. “It could take anywhere from a few days to a few weeks to consolidate the data depending on the size of the hedge fund, whether the data is located on a system or spreadsheet, the investment strategy of the hedge fund and the number of hedge funds for which the adviser must file a Form PF,” says Saffer. “That doesn’t give larger hedge funds which have to file 15 days after each calendar quarter much time to prepare.”

4. How is the data collected?

The adviser must know what system it will use to pull all the data together to fill out Form PF. “The best approach is to license or create a data warehouse which will aggregate the information from multiple systems,” says Saffer. “If the fund manager is still relying on Excel spreadsheets, it will need to designate either a single or multiple individuals to ensure the data is accurate and inserted in the correct sections and columns provided by Form PF.”

5. Who will fill out Form PF?

The adviser needs to assign one person to “own the process” and be responsible for ensuring the data is available and aggregated correctly so the Form PF can be filed out accurately. “Some hedge funds will have automated reporting systems, while others will still rely on operations executives to rekey data,” says Saffer. “Either way a legal or compliance official will need to sign off after Form PF is completed.”