CFTC Proposes Joint Rule With SEC On Hedge, P.E. Disclosure

Jan 27 2011 | 1:19pm ET

A day after the Securities and Exchange Commission moved forward with plans to force hedge funds and private equity funds to increase their disclosures to regulators, the Commodity Futures Trading Commission followed suit.

The CFTC yesterday proposed a rule that would require private fund advisers to provide an array of information to it and the SEC for risk-monitoring purposes. The proposed new regulation, mandated by last year's financial reform law, was written jointly by the two regulators. The SEC and CFTC would also share the information they collect with the Financial Stability Oversight Council.

Included in the information sought by the two agencies is data on leverage, counterparty risk and positions. While all funds would have to make some disclosures, the brunt of the new rule would fall on the largest managers, those with more than $1 billion, which will have to make more frequent and more detailed disclosures.

"What this does is bring more transparency to the regulators," CFTC chief Gary Gensler said.

Both the CFTC and SEC are accepting comments on the proposal. Both will have to vote again to finalize the new rule.


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