The Administration and the Department of the Treasury took another step in their reform agenda for the nation's financial markets by delivering hedge fund regulation to Congress for consideration. As expected, the legislation proposes to require hedge fund advisers to register with the SEC, subject hedge funds to recordkeeping requirements, and impose new restrictions and requirements on hedge funds' dealings with investors, creditors, counterparties, and regulators.
In order to monitor the hedge fund industry for potential systematic risk, the proposed legislation would require hedge funds to provide detailed information on the amount of assets under management, borrowings, off-balance sheet exposures, counterparty credit risk exposures, trading and investment positions, and other important information. The legislation would also give the SEC the power to conduct examinations and share information with the Federal Reserve, and the Financial Services Oversight Council.
This latest legislation contains few unexpected proposals, and does not differ significantly from other hedge fund regulation efforts, such as the "Hedge Fund Adviser Registration Act" or the "Hedge Fund Transparency Act," previously proposed.
The full text of the "Private Fund Investment Advisers Registration Act of 2009" delivered to Congress on July 15 is available at: http://www.treas.gov/press/releases/reports/title%20iv%20reg%20advisers%20priv%20funds%207%2015%2009%20fnl.pdf
- "Aguilar Warns of Hedge Fund Risk," June 30, 2009
- "Connecticut Moves to Regulate Hedge Funds," June 2, 2009
- "Hedge Fund Adviser Registration Act," April 1, 2009
- "Legislative Spotlight Falls on Hedge Funds," February 4, 2009