CFTC and SEC propose to change reporting rules for large hedge funds on crypto exposure
Both US financial regulators cited the growth of the hedge fund industry as the reason for the proposed change, in part because investments in digital assets are becoming more mainstream.
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The U.S. Securities and Exchange Commission, or SEC, and the Commodity Futures Trading Commission, or CFTC, have proposed requiring large advisers to certain hedge funds to report any exposure to digital assets.
>In a notice released Wednesday, the SEC and the CFTC proposed to amend their confidential reporting form for certain private fund investment advisers of at least $500 million. The PR form would require qualifying hedge funds not to include exposure to cryptocurrencies when reporting “cash and cash equivalents,” but instead add them in a different category “to accurately report investment strategies.” digital assets".
Both U.S. financial regulators cited the growth of the hedge fund industry as the reason for the proposed change, in part because investing in digital assets has become more commonplace since the introduction of Form PR in 2008. According to the SEC and the CFTC, having investment advisers provide more detailed information on strategies and exposure to certain assets would allow the Financial Stability Oversight Council to better assess potential risks to the U.S. economy.
“In the decade since the SEC and CFTC jointly adopted Form PF, regulators have gained critical knowledge about private funds,” said SEC Chairman Gary Gensler. "Since then, however, the private equity industry has grown nearly 150% in gross asset value and evolved in terms of business practices, complexity [...] If adopted, [this proposal] would improve the quality of information we receive from all Form PF filers, with a particular focus on large hedge fund advisers."
Our Committee will meet shortly to consider proposed amendments to Form PF to modify reporting requirements for all filers and large hedge funds ...
Both US financial regulators cited the growth of the hedge fund industry as the reason for the proposed change, in part because investments in digital assets are becoming more mainstream.
New
The U.S. Securities and Exchange Commission, or SEC, and the Commodity Futures Trading Commission, or CFTC, have proposed requiring large advisers to certain hedge funds to report any exposure to digital assets.
>In a notice released Wednesday, the SEC and the CFTC proposed to amend their confidential reporting form for certain private fund investment advisers of at least $500 million. The PR form would require qualifying hedge funds not to include exposure to cryptocurrencies when reporting “cash and cash equivalents,” but instead add them in a different category “to accurately report investment strategies.” digital assets".
Both U.S. financial regulators cited the growth of the hedge fund industry as the reason for the proposed change, in part because investing in digital assets has become more commonplace since the introduction of Form PR in 2008. According to the SEC and the CFTC, having investment advisers provide more detailed information on strategies and exposure to certain assets would allow the Financial Stability Oversight Council to better assess potential risks to the U.S. economy.
“In the decade since the SEC and CFTC jointly adopted Form PF, regulators have gained critical knowledge about private funds,” said SEC Chairman Gary Gensler. "Since then, however, the private equity industry has grown nearly 150% in gross asset value and evolved in terms of business practices, complexity [...] If adopted, [this proposal] would improve the quality of information we receive from all Form PF filers, with a particular focus on large hedge fund advisers."
Our Committee will meet shortly to consider proposed amendments to Form PF to modify reporting requirements for all filers and large hedge funds ...
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