CFTC Proposes New Fund Regs

The Commodity Futures Trading Commission issued proposals yesterday that would force hedge funds and other private-fund advisers to report information to regulators. The aim is to monitor and mitigate risk to the US financial system.

In the draft proposals, fund managers with assets of more than $1 billion would be required to provide more frequent and detailed information than advisers of smaller funds.

"What this does is brings more transparency to the regulators," CFTC Chairman Gary Gensler said at the January 26th meeting.

Regulators are not allowed to take any fund's risk status public but it must be made available to the Financial Stability Oversight Council, the new body created by the Dodd-Frank law that was passed last year. The FSOC has met roughly four times since the fall of 2010.

Under the CFTC proposal, an estimated 1,200 fund advisers registered solely with the CFTC -- and not the SEC -- would be required to comply with the new risk-reporting mandate.

The proposed regulations were co-authored with the SEC, which issued its own proposals on Tuesday, January 25th that focused on private-fund managers that are registered with the SEC. More than 2,000 fund advisers overseen by the SEC or by both the agencies would be covered by the joint rules, reports the Wall Street Journal. Phil Albinus is the former editor-in-chief of Advanced Trading. He has nearly two decades of journalism experience and has been covering financial technology and regulation for nine years. Before joining Advanced Trading, he served as editor of Waters, a monthly trade journal ... View Full Bio