Obama to tighten the screws on US hedge funds
The Obama Administration is seeking to increase the regulatory oversight of hedge funds, according to media reports out of the US.
Reports state the Obama Administration plans to unveil draft legislation that will require US hedge funds with more than $30 million in assets under management to register with the Securities and Exchange Commission (SEC).
Reuters quotes the US Treasury assistant secretary for financial institutions, Michael Barr, saying certain hedge funds will be subject to regulation by the US Federal Reserve, as well as the SEC.
Under the Obama Administration's proposal, advisers of hedge funds will be required to periodically disclose to both regulators and investors more information about the characteristics of their funds. This would include asset size, borrowings, off-balance sheet exposure and other matters.
According to Reuters, the proposed bill regulators will also allow the SEC to gain access to information to determine potential systemic risks that certain hedge funds may pose.
A Financial Times report said the move ends decades of hedge fund independence from regulatory oversight in the US. The paper said the proposed bill will include more stringent measures than had been expected by many in the alternative investment industry.
According to the Financial Times, Barr said while hedge funds had not been at the centre of the current financial crisis, their deleveraging and lack of transparency had been a significant contributing factor to market disorder.
“These firms continue to present unknown risks, and that lack of transparency is no longer tenable,” Barr said.
Recommended for you
Insignia Financial has reported net inflows of $448 million into its asset management division in the latest quarter, as well as popularity from advisers for its MLC managed accounts.
With ASIC questioning the dominance of research houses when it comes to retail usage of private market funds, a research house has shared how its ranking process sits alongside ASIC’s priorities.
Two Australian active fund managers have been singled out by Morningstar for their ability to achieve consistent performance and share price growth in the past 12 months.
Pinnacle Investment Management has expanded its private market coverage, forging a strategic partnership with a private markets manager via a 13 per cent stake acquisition.
