Regulators propose to require hedge funds to disclose crypto exposure
By amending Form PF
The United States Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) has proposed requiring large advisers to certain hedge funds to report their crypto exposure.
In a Wednesday press release, the SEC and CFTC proposed amending their confidential reporting form. The amendments would require investment advisers to private funds with a net value of at least $500 million to report their crypto exposure on Form PF, a confidential filing introduced during the 2008 financial crisis. Funds would also provide details on concentrations and borrowing.
The financial regulators cited the growth in the private fund industry as the reason for the proposed change. According to the SEC and CFTC, requiring investment advisers to provide detailed information on exposure to certain assets would enhance the Financial Stability Oversight Council’s ability to assess systemic risk and bolster wider regulatory oversight.
“In the decade since the SEC and CFTC jointly adopted Form PF, regulators have gained vital insight with respect to private funds. Since then, though, the private fund industry has grown in gross asset value by nearly 150 percent and evolved in terms of its business practices, complexity, and investment strategies,” said SEC Chair Gary Gensler. “I am pleased to support the proposal because, if adopted, it would improve the quality of the information we receive from all Form PF filers, with a particular focus on large hedge fund advisers. That will help protect investors and maintain fair, orderly, and efficient markets.”
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