Tuesday, 29 July 2014
Last updated 16 hours ago
Oct 17 2006 | 8:23am ET
Senate Finance Committee Chairman Charles Grassley (R-Iowa) has expressed his concern over the lack of public information available on hedge funds to Treasury Secretary Henry Paulson. In a letter sent yesterday to Paulson, the chairman wrote that, following the collapse of hedge fund Amaranth Advisors he became concerned about the impact such an event has on average American workers.
“It is often suggested that hedge funds are only available to very wealthy or sophisticated investors. However, this ignores the fact that tens of millions of Americans are exposed to the risk of hedge funds through intermediaries such as pension funds, endowments, and other investment pools,” he wrote.
Grassley explained that he asked his staff to report to him on major pension fund holdings in Amaranth and other energy-focused funds, but his staff was unable to find the information. “Not only was this information not publicly available, it also was impossible to even determine the identity of the largest energy-focused hedge funds.”
In the letter, Grassley asked Paulson what information, if any, hedge funds are required to report to the Treasury Department. “I also would appreciate your views on how Congress could improve hedge fund transparency,” he wrote.
Talk of regulating hedge funds has been hot topic in Washington since a federal appeals court overturned a rule in June requiring hedge funds to register with the SEC. Last month the House of Representatives passed a bill requiring the government to perform a study of the hedge fund industry. In July, Securities and Exchange Commissioner Christopher Cox told members of Congress that his agency was working closely with other government agencies to determine the risks hedge funds posed on the financial markets and the economy.
And the controversy doesn’t stop at the Beltway. Connecticut Attorney General Richard Blumenthal has established a hedge fund task force and Massachusetts Secretary of State William Galvin has been an outspoken critic of the use of hedge funds in the state’s public pension system.
Jul 8 2014 | 10:48am ET
The surge in derivatives regulation is among the most complex challenges facing the financial services industry today. Northern Trust’s Joshua Satten recently spoke with FINalternatives to share insights into the challenges presented by new regulation and explore how the industry is responding. Read more…