Wall Street & Technology is part of the Informa Tech Division of Informa PLC

This site is operated by a business or businesses owned by Informa PLC and all copyright resides with them. Informa PLC's registered office is 5 Howick Place, London SW1P 1WG. Registered in England and Wales. Number 8860726.


09:51 AM
Connect Directly

SEC Tightens Rules for Hedge Funds

Large private funds must reveal potential levels of risk to US marketplace.

Hedge funds and other private funds would have to report key information to regulators under a new rule proposed by the US Securities and Exchange Commission.

The proposal, put forth yesterday, is part of the Dodd-Frank Wall Street reform law. It will provide to the newly formed Financial Stability Oversight Council more information about hedge funds and other private pools of capital to ensure their trading activities do not pose a risk to the overall financial system.

Under the proposal, large hedge funds would need to report information about asset classes, geographical concentration, leverage, and liquidity. Likewise, large private equity companies would need to respond to questions on the leverage incurred by each fund's portfolio companies.

The SEC voted unanimously to put the proposal out for public comment.

The Commodity Futures Trading Commission will consider introducing a similar proposal on Wednesday, January 26, 2011.

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

Register for Wall Street & Technology Newsletters
Stressed Out by Compliance, Reputational Damage & Fines?
Stressed Out by Compliance, Reputational Damage & Fines?
Financial services executives are living in a "regulatory pressure cooker." Here's how executives are preparing for the new compliance requirements.