The Securities and Exchange Commission is poised to throw the alternative investments industry a bone this afternoon, raising the threshold for the most comprehensive disclosures to the regulator by hedge funds by half-a-billion dollars.
Under the proposal, to be finalized and voted upon by the commission today, hedge fund managers with at least $1.5 billion in assets would be subjected to the most onerous reporting rules, including quarterly reports covering assets, leverage, positions, valuation and trading.
Private equity funds will get an even bigger break: Only firms with at least $2 billion will be subject to the most stringent disclosures, and even they will only have to report annually, rather than quarterly.
Liquidity funds will still be stuck with the $1 billion threshold.
"The SEC anticipates that most private fund advisers will be regarded as smaller private fund advisers, but that the relatively limited number of large advisers providing more detailed information will represent a substantial portion on industry assets under management," the SEC said. "As a result, these thresholds will allow [the Financial Stability Oversight Council] to monitor a significant portion of private fund assets while reducing the reporting burden for private fund advisers."