Top US regulatory agencies seek to mandate new crypto disclosure guidelines for private funds
Two prominent US regulators want to add strengthened crypto disclosure guidelines for private hedge funds.
According to a recent press release, the US Securities and Exchange Commission (SEC), in cooperation with the Commodity Futures Trading Commission (CTFC), is proposing improved reporting rules for large private funds.
The updated regulations will require funds to provide specific details about their investment strategies and financial positions, including crypto assets.
The SEC says the new guidelines will strengthen protections for investors and help the regulator maintain proper oversight of the industry.
As stated by SEC Chairman Gary Gensler,
“In the decade since the SEC and CFTC jointly adopted Form PF, regulators have gained important insights regarding private funds. Since then, however, the private fund industry has grown in gross asset value by nearly 150% and evolved in terms of business practices, complexity and investment strategies.
I am pleased to support the proposal because, if adopted, it will improve the quality of information we receive from all Form PF filers, with a particular focus on large hedge fund advisers. It will help protect investors and maintain fair, orderly and efficient markets.”
Form PF is what private fund advisers use to report assets under management to the Financial Stability Oversight Council (FSOC) for the agency to monitor risk.
However, SEC Commissioner Hester Pierce opposes the idea, saying the amended rules would be “adding questions about the nice to know, rather than the need to know variety” to Form PF.
“Today’s proposal stretches a very limited data collection tool beyond its intended purpose…
Private fund investors—typically institutional investors, such as insurance companies, university endowments, pension funds, and high-income and high-net-worth individuals—are able to make their own risk assessments.
The SEC should not step in to protect them when their investments do not perform as hoped.”
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