Alternative investment managers relying on the Windows system were not immune to the computer failures that swept the globe on Friday, prompting law firm Seward & Kissel to issue a note to its affected clients on Saturday, July 20.
Large hedge fund advisers (defined by the SEC as firms with at least $1.5 billion in hedge fund assets under management) need to file a current report in compliance with newly enacted Form PF rules as soon as practicable, the firm said. This should be no later than 72 hours from the occurrence of one or more trigger events that occur at a qualifying hedge fund, the advisory note said.
The CrowdStrike outage was the result of a sensor configuration update to Windows systems that triggered a logic error that resulted in a system crash on impacted systems, the cybersecurity firm announced on Saturday. Reportedly, up to 8.5 million Microsoft devices were impacted by the failure that CrowdStrike was quick to point out was not the result or related to a cyberattack.
Managers must report by today
The outage triggers a current reporting event filing, in particular, due to an “operations event,” according to Seward & Kissel. As defined by the Form PF rule, an operations event is when a reporting fund or private fund adviser experiences a ‘significant disruption or degradation of the reporting fund’s critical operations. This includes an event at a service provider to the fund, they added.
Lawyers said that advisers that if they had downtime involving critical infrastructure such as an order management system or live feeds relevant for trading, pricing or valuation they have a 72 hour reporting window that would most likely fall on Monday, July 22.