By Katanga Johnson
WASHINGTON (Reuters) – The U.S. Securities and Exchange Commission (SEC) will propose new rules on Wednesday to boost hedge fund and private equity fund disclosures as it looks to increase oversight of the private funds industry and better monitor systemic risks.
The proposed changes to the SEC’s “Form Private Fund (PF)” rules would require private funds to disclose details of material events within one business day, compared with the current quarterly or annual requirement, depending on the firm.
Form PF is the primary way private funds disclose purchases and sales of securities to the agency.
The draft rule would also reduce the Form PF reporting threshold for private equity advisers from $2 billion in assets under management to $1.5 billion in order to capture more firms.
The private funds industry drew fresh scrutiny https://www.reuters.com/article/us-retail-trading-funds-regulation-analy-idUKKBN2A218L after hedge fund de-leveraging contributed toward turmoil in the U.S. Treasuries market in March 2020 and hedge funds were again at the center of last year’s GameStop “meme-stock” saga.
While the data would not be publicly disclosed, it would help regulators better spot signs of trouble, such as big losses, significant margin and counterparty default events, material changes in prime broker relationships and other events associated with withdrawals and redemptions, the SEC said.
(Reporting by Katanga Johnson in Washington; Editing by Michelle Price and Chizu Nomiyama)
