U.S. SEC will vote on private fund and hedge fund disclosures. On Wednesday, the SEC will vote whether to impose new regulations for hedge fund and private equity fund advisors to increase openness, competition, and efficiency in the $ 25 trillion business.
The SEC will vote on a proposal to revise Form PF, which was implemented after the 2008-2009 financial crisis, to monitor private fund risks and improve major funds’ disclosures regarding their investing strategy and leverage.
“Since the SEC put in place Form PF 12 years ago, a lot has changed,” SEC Chair Gary Gensler said at a Managed Funds Association meeting on Tuesday.
“The proposal’s new transparency would relate to fees, expenses, performance, and side letters,” he added.
The regulation amendments would force private fund advisers like private equity companies and hedge funds to publish quarterly fees and costs to illuminate the fast-increasing market sector.
A 2022 SEC plan would require large hedge fund managers to notify financial authorities of incidents that may suggest considerable stress, systemic risks, or investor loss, such as major margin calls or counterparty defaults.
The plan requires SEC-registered fund advisers to get yearly audits for each private fund under administration and disclose “fairness opinions” that outline specific business connections.
Advisors must disclose their tactics, leverage, and clawbacks of general partner performance remuneration in their annual reports.
Another SEC-CFTC plan would increase reporting requirements for major hedge fund advisers.
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