Financial Reform Watch

Published — June 22, 2011 Updated — May 19, 2014 at 12:19 pm ET

Reform reading: Hedge, private equity funds now subject to SEC regulation

SEC Chairman Mary Schapiro testifies at Congressional hearing in 2010. Evan Vucci/The Associated Press

Funds have until March 30 to register with agency


A daily round-up of analysis, commentary and news about the Dodd-Frank financial reform law.

Hedge fund regulations – The Securities and Exchange Commission adopted rules today that will require hedge funds and private equity funds that each manage more than $150 million in assets to register with the agency by March 30.

The move will subject funds to surprise examinations by the SEC, and require them to file reports about the size and strategy of their funds, any conflicts of interest, disciplinary history, and the identities of key gatekeepers such as auditors and prime brokers. “Our proposal will give the Commission, and the public, insight into hedge fund and other private fund managers who previously conducted their work under the radar and outside the vision of regulators,” SEC Chairman Mary Schapiro said.

The commission’s two Republican members opposed a provision that requires some venture-capital managers to report information about their funds, saying that the costs of doing so would hinder capital formation and innovation. Venture capital funds “which by definition cannot be sold to the public, already provide meaningful disclosure to their investors because investors demand information, and fund investors perform their own diligence in evaluating whether to invest in a fund,” said SEC Commissioner Troy Paredes.

Precious metal trading – Some dealers will suspend U.S. trading of over-the-counter precious metals due to the Commodity Futures Trading Commission’s delay in rules for off-exchange commodity transactions with retail customers.

Online dealer told clients in a letter that it must discontinue metals trading for U.S. residents by July 15, Reuters reports. The lack of final CFTC rules creates a legal risk for companies and traders.

Lawsuit report card The $153 million JPMorgan Chase & Co. settlement with the Securities and Exchange Commission is the latest addition to a handy report card tracking major federal lawsuits from the 2008 financial crisis.

So far, the New York Times’ report card has just 3 criminal cases involving executives at Bear Stearns, Credit Suisse, and Taylor Bean & Whitaker, and 11 civil cases on it.

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