Compliance January 25, 2011

SEC Adopts Reporting Requirements for Hedge Fund Advisers

January 25, 2011 (PLANSPONSOR.com) - The SEC unanimously proposed that advisers to hedge funds and other private funds report key information to regulators.
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The proposal, required by the Dodd-Frank financial reform bill, would arm the newly formed Financial Stability Oversight Council with better information about hedge funds and other private pools of capital to ensure their trading activities do not pose a risk to the broader marketplace, according to Reuters.  

SEC Chairman Mary Schapiro said the most stringent reporting requirements under the rule will apply to about 200 U.S.-based large hedge fund advisers, representing more than 80% of assets under management. About 250 U.S. based advisers to large-sized private equity funds would be subject to the more extensive reporting rules as well.  

“Today’s proposal stems from the lessons learned during the recent financial crisis, lessons about the importance of monitoring and reducing the possibility that a sudden shock or failure will cascade through the entire financial system,” Schapiro said, according to the news report.

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